GM releases the first sketch of its new ATS small car.

Cadillac will get its much-anticipated entry-level luxury car in late 2012, Mark Reuss, President of General Motors North America, confirmed as he released a sketch of the new offering during an automotive industry conference in Northern Michigan. The ATS will be joined by a new large car Caddy will dub the XTS.

The new compact is one in an assortment of offerings Caddy will get over the next several years as GM plays catch-up with rivals like BMW, Audi and Lexus, all of which have significantly expanded their offerings in recent years.  GM will also launch a large luxury model and is developing another even-larger model that could go up against the likes of the Mercedes-Benz S-Class.

“The car we codenamed ATS is being developed to be a driver’s car on an all-new Cadillac-specific RWD-AWD architecture,” Reuss said, during an appearance at the annual Management Briefing Seminars in Traverse City, Michigan. “We have extensively and exhaustively studied the competitive segment, and we have benchmarked the best. And when this car comes out, that will be readily apparent.”

Caddy showed of this prototype of the upcoming XTS at the 2010 Detroit Auto Show.

His comments left a number of uncertainties, starting with the final name of the new small car – which will go up against the likes of the BMW 3-Series and Audi A4.  It is uncertain if Cadillac will stick with the ATS designation, though it is unlikely it will shift from the alpha strategy it now uses for models like the larger CTS and return to such once-legendary nameplates as Seville or Eldorado.

The sketch suggests that the new ATS will continue the “Art & Science” design theme that Cadillac introduced on its first-version CTS, though the look is a little softer than the original, knife-sharp shape that helped the brand separate itself from the competition. The silhouette suggests a slightly more rounded, coupe-like curve to the roof, a concession to recent luxury market trends.

The ATS will use a smaller version of the CTS platform, a flexible “architecture” that has also been used for the brand’s current STS model.  The latter will be replaced by the new XTS, while the next-generation CTS will grow a bit larger to more directly challenge offerings like the Mercedes E-Class and BMW 5-Series.

As for the ATS, its smaller size appears directly intended to help it get a toehold in Europe, where Caddy has long struggled, replacing the largely unloved Cadillac BLS.  That would almost certainly require the addition of a diesel powertrain, though it is unclear whether GM would offer an oil-burner option in the U.S.  Meanwhile, the addition of the ATS could also provide the luxury division a bigger inroad into the fast-growing Chinese luxury car market.

The small Cadillac will begin production next summer at GM’s refurbished assembly plant near Lansing, Michigan.  The maker recently invested $190 million to upgrade that factory, and another 600 jobs will be added to handle ATS assembly operations.