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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.

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