Cadillac hopes the third time's a charm.

In yet another bid to unseat upscale German brands BMW and Mercedes-Benz, the luxury division of General Motors Co. unveiled its new ATS small sedan at the North American International Auto Show in Detroit.

The ATS will battle in the most crowded segment of the luxury market, facing off against a new version of the BMW 3 Series, the perennial leader, and competent rivals including the Infiniti G, Lexus IS and Mercedes C Class.

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"People who buy the BMW 3 Series are probably some of the most educated and savvy buyers in the U.S. These people know how good the car is," said Mark Reuss, president of GM North America.

That's why Reuss has paid more attention to the ATS than any other project at the automaker. It's been designed from the ground up, and he said it would match or beat the driving characteristics of any rivals, including the BMW.

"It is strategically a very important product for Cadillac," said Ed Kim, director of industry analysis at AutoPacific Inc., a Tustin automotive consulting firm. "Cadillac wants younger buyers to come into the fold, and they hope to move them up through the brand."

Brad Willingham, co-owner of Boulevard Cadillac in Long Beach, is eager to get the ATS in his showroom.

"It will be very exciting," Willingham said. "To have a vehicle that appeals to a whole new group of people is a dealer's dream."

But he's mindful of Cadillac's past failures.

"This is a car segment that Cadillac has never had success with," Willingham said.

Indeed, Cadillac's first two attempts at the same strategy weren't pretty.

First there was the Cimarron, a rebadged Chevrolet Cavalier with fancier paint and upholstery that came out for the 1982 model year. Largely panned and a poor seller, no one ever mistook a Cimarron for a Mercedes. It was retired after the 1988 model year.

Cadillac tried again in 1997, introducing the sport Catera. This time at least, Cadillac was competing against the Germans with a German car. The Catera, an Opel Omega rebadged for U.S. sales, drove competently but was tripped up by reliability problems and a lack of appeal to Cadillac's aging customer base.

Reuss said Cadillac would get the car right this time.

First, it is building on a brand-new rear-wheel-drive platform. This isn't another case of looking at what's in the parts bin, slapping it together and polishing it up with a Cadillac paint job and name badge.

"If we are passing off cars that are built from other existing platforms, this won't work," Reuss said.

GM is bringing a new engine to the fight: a 2-liter, turbocharged four cylinder that will produce 270 horsepower. Cadillac will also offer a normally aspirated 2.5-liter, four-cylinder engine and a 3.6-liter V-6 engine in the ATS.

Like the BMW, the ATS will have a 50-50 weight distribution that will enhance handling and road feel, giving it the sporty character it needs to make its case as a true sports sedan, Reuss said.