Business
5:03 pm
Wed January 11, 2012

Cadillac Gears Up To Take On German Automakers

This year's auto show in Detroit could set the stage for a shake-up in the fiercely competitive — and hugely profitable — luxury car scene. That's because there's a new kid on the block, and its name is Cadillac.

The General Motors company says its new small, high-performance ATS will allow it to compete for the first time with Audi, Mercedes-Benz and BMW. But getting a brand-new luxury car like the ATS ready for market can be a grueling process.

Much as an athlete goes into training before a big race, the new Cadillac ATS went to the toughest racetrack in the world, the Nurburgring in Nurburg, Germany.

Chris Berube, lead development engineer for the ATS, describes the track as "treacherous" and even "infamous." He says that while they can still get a lot of testing done at the GM track in Milford, Mich., Nurburgring is the ultimate crucible. After all, with speeds sometimes exceeding 150 mph, Nurburgring only allows the industry's best drivers onto its track.

"You're operating the vehicle at very high speeds, very high lateral accelerations, and the guardrail is 2 feet off the pavement," Berube says. "So mistakes are costly."

And then there are the three spots on the track where the car goes completely airborne. Engineers dryly refer to what happens when the car lands as "full compression," or "wham."

Berube says people who buy a car like the ATS most likely won't test its limits the way they get tested at Nurburgring, but high performance is the cost of admission in the small-luxury-car arena. Customers won't even look at the ATS if they don't think it's as agile as the competition.

The Competition

If luxury-car makers like BMW are worried, they're not showing it. BMW is unveiling an update to its own small luxury car at this year's Detroit Auto Show. Its 3 Series is a direct competitor to the ATS — and one of the cars Cadillac used as a benchmark.

BMW North America President Ludwig Willisch says his company takes the competition seriously. But he isn't worried about the ATS yet; instead, he describes himself as "relaxed." That's because competitors have been trying to take BMW down for decades — and they've failed every time.

"Obviously, we [have been] the leader in that segment for years," he says. "We have a very sharp profile, because it is the ultimate driving machine."

'No One's Ever Said It's Going To Be Easy'

After Nurburgring, GM is pretty confident the ATS has a "silk glove" refinement that the competition lacks.

Aaron Bragman, an analyst with IHS Automotive, has seen the ATS but he hasn't driven it yet. "It basically is meant to go head to head with the best offerings from the German automakers," he says, "and, on paper at least, it seems that they've accomplished that."

Bragman says there's potential for the car to do well in the U.S. and a lot of potential for it to do well in China — the world's largest and fastest-growing car market. But he's highly skeptical the ATS can compete in Europe, BMW's home turf.

Joel Ewanick, head of global marketing for GM, says the company is serious about becoming a top global player in the luxury car market, and he insists it will happen — some day. Though he concedes, "I'm not going to say it's going to be easy. No one's ever said it's going to be easy."

Easy or not, the stakes are high for GM. Luxury cars like the ATS bring in more profit per car, much more than GM's small economy models like the Chevy Cruze. (Not surprising given that the Cruze costs around $17,000 and the ATS will cost at least twice that.)

Meanwhile, don't expect Cadillac's competitors to worry too much about the ATS ahead of its dealership debut this summer.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

Transcript

MELISSA BLOCK, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

AUDIE CORNISH, HOST:

And I'm Audie Cornish. This year's Detroit Auto Show could set the stage for a shake-up in the luxury car scene, which is fiercely competitive and hugely profitable. There's a new kid on the block from Cadillac. The company says its small, high-performance car, the ATS, can compete head to head for the first time with Audi, Mercedes-Benz and BMW. Tracy Samilton of Michigan radio has that story.

TRACY SAMILTON, BYLINE: It's grueling, getting a brand-new small luxury car like the ATS ready. So you take it on the toughest testing track in the world, the Nurburgring in Germany. Chris Berube's driving around GM's slightly more mundane test track in Milford, Michigan today. But he's been on the Nurburgring a lot recently.

CHRIS BERUBE: It's treacherous. It's been defined as infamous.

SAMILTON: Berube is lead development engineer for the ATS. He says performance is the price of admission for this kind of car. Sometimes exceeding 150 mph, only the best drivers in the auto industry are permitted onto the Nurburgring.

BERUBE: So, you're operating the vehicle at very high speeds, very high lateral accelerations, and the guardrail is 2 feet off the pavement. So mistakes are costly.

SAMILTON: And then there's those three places on the track where the car goes completely airborne. Engineers call that full compression, better known as wham. If luxury-car makers like BMW are worried at all, they're not showing it. BMW is unveiling its new 3 Series at the Detroit Auto Show this year. The 3 Series is a direct competitor to the ATS. BMW's North American president, Ludwig Willisch, is at the automaker's auto show lounge where waiters are serving espresso.

LUDWIG WILLISCH: We take every competitor serious.

SAMILTON: On the other hand...

WILLISCH: I'm quite relaxed.

SAMILTON: That's because competitors have been trying and failing to take down BMW for decades.

WILLISCH: Obviously, we're the leader in that segment for years, so we are very authentic with the car. We have a very sharp profile, because it is the ultimate driving machine.

SAMILTON: But after Nurburgring, GM is pretty confident the ATS has a, quote, "silk glove" refinement that the competition just doesn't have. Aaron Bragman is an analyst with IHS Automotive. He's seen the car, but he hasn't driven it yet.

AARON BRAGMAN: It basically is meant to go head to head with the best offerings from the German automakers. And, on paper at least, it seems that they've accomplished that.

SAMILTON: Bragman says there's potential for the car to do well in the U.S. and a lot of potential for it to do well in China, the world's largest and fastest-growing car market. But he's doubts the ATS can compete in Europe, BMW's home turf. GM global marketing head, Joel Ewanick, says the company is serious about being one of the top global players for luxury cars.

He insists selling Cadillac in Europe can and will happen, some day.

JOEL EWANICK: Well, I'm not going to say it's going to be easy. I mean, no one's ever said it's going to be easy.

SAMILTON: Easy or not, the stakes are high for General Motors. The company an awful lot riding on this one vehicle. Luxury cars like the ATS bring in more profit per car, much more than GM's small economy models like the Chevy Cruze. Not surprising, given that the Cruze costs around $17,000 and the ATS will likely cost at least twice that. Meanwhile, don't expect Cadillac's competitors to worry all that much before the ATS arrives in dealerships this summer.

For NPR News, I'm Tracy Samilton. Transcript provided by NPR, Copyright National Public Radio.