Cadillac Working on Possible CLA, A3 Fighter

Detroit maker reportedly working on rear-drive subcompact.

by on Aug.18, 2014

The ATS may not be Cadillac's smallest offering in the near future. The company is contemplating a Audi A3/Mercedes-Benz CLA fighter.

It’s turning into a busy season for Cadillac, what with a string of new product launches ahead, and a new global boss set to report to work this week – and former Infiniti chief Johan de Nysschen will be facing some tough decisions when he settles in at his new office at Detroit’s Renaissance Center.

One of the most critical could be whether or not to proceed with a new small sedan Cadillac has apparently begun pulling together, a vehicle that could target one of the world’s fastest-growing luxury niches. With Caddy now looking beyond American shores for its future growth, taking on the likes of the Mercedes-Benz CLA and Audi A3 could be critical.

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The new entry, if approved, would differ from some of the competition – such as the front-drive CLA – by sticking with rear-wheel-drive, though an all-wheel package apparently also would be in the works, according to an interview Cadillac marketing chief Uwe Ellinghaus had with Car & Driver magazine. Critically, it would slot under the smallest model in the current Caddy line-up: the ATS.

What’s clear is that Cadillac is playing a game of catch-up, especially when it comes to its three key German rivals, Audi, BMW and Mercedes. The latter maker’s U.S. CEO Steve Cannon recently told TheDetroitBureau.com that the company plans to launch 30 new models by decade’s end, about one per quarter.

Significantly, while those offerings will cover the entire luxury spectrum at the high end, including the ultra-h S600 Pullman limousine, there will be a number of new small, low-end models. The CLA will soon share showroom space with the GLA crossover. And at least two other small models will follow when Mercedes’ new assembly plant in Aguascalientes, Mexico, goes into operation in a few years.

Cadillac might be ready to get into the small luxury car market and duke it out with the likes of Audi's A3.

Cadillac is racing to market with its own product offensive, including V-Series versions of the ATS and CTS, the new Escalade, and a long-awaited flagship sedan. A compact crossover, slotting under the soon-to-be-updated SRX also is in the works. And a convertible could follow, as TheDetroitBureau.com recently reported, in about three years.

But going for something smaller than the ATS seems to be a new priority, according to Ellinghaus. He offered few details in his interview, but did note that while many of Caddy’s competitors are opting for space-saving FWD architectures, Cadillac is staying focused on rear- or all-wheel packages.

“Our future is rear-wheel drive and, of course, all-wheel drive where appropriate,” Ellinghaus emphasized. “My personal crusade is to spare us a hell of a lot of dilution of our emerging brand image by moving to front-wheel drive for potential smaller cars. As you know, the entire competition is moving to front-wheel drive for their entry-level cars.”

The marketing chief subtly delivered another hint of Cadillac’s strategy, suggesting that Caddy will not try to be the lowest-priced entrant in the segment – which would be easier to achieve with a front-drive package.

(To see TDB’s first drive in the 2015 Cadillac ATS, Click Here.)

That said, what is the reason to buy a Cadillac in that segment in a couple of years’ time when all the German competitors will have front-wheel drive? It is that we are maybe — if we are lucky — the only ones left with rear-wheel drive,” the maker’s marketing chief said.

While it’s far too early to know how new global Cadillac czar de Nysschen will react to the project, it’s significant to note that he was a strong proponent of adding small cars when running the U.S. operations for Audi. And he was planning to add an entry-lux model to the Infiniti line as part of his most recent job.

(Click Here for details on Renovo’s 500-hp electric super car.)

De Nysschen, however, is also a big believer in the power of performance cars to build a brand’s image – as he demonstrated through the creation of the Japanese luxury maker’s new Eau Rouge line. He seems certain to embrace the latest Cadillac V-Series models. Whether he will also be willing to put cash down at the bottom of the luxury segment remains to be seen.

(To see more from the Woodward Dream Cruise, Click Here.)

But insiders hint that the South African-born executive only agreed to join Cadillac after being given assurances he’d have the financial resources to flesh out its anemic product line-up. Considering the breadth of the competition Cadillac is facing, that could mean plenty of new models over the coming years.

Part of the challenge will be determining product cadence. Even with more cash, Caddy will have to pace itself. Timing could depend on not just how much and how fast the General Motors brand plans to grow, but also where. It recently launched production in China and sales have been soaring. The demands of the Chinese market could determine what models Cadillac will be adding next.

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