Cadillac considers smaller SUV to compete against BMW X3 by GM

DETROIT  -- BMW is already been targeted by General Motors Co., with a new compact car, is considering a small sport-utility vehicle to compete against the German automaker's X3.

"We're looking at options there," Kurt McNeil, Cadillac's vice president of sales, said today in an interview at the Detroit auto show. "I think it would go a little bit more head-to-head with like the X3."

GM is trying to boost sales of Cadillac models smaller than the BMW, which started U.S. luxury sales lead of Toyota Motor Corp. 's Lexus in 2011. GM introduced the Cadillac sedan ATS Sunday to take the BMW 3 Series and Mercedes C-Class.

A small luxury SUV Cadillac could build on the benefits of increased SRX SUV, which increased U.S. sales 11 percent last year. BMW redesigned X3 helped the company move to Lexus, which had held first place among luxury brands in the U.S. for 11 years

A small luxury SUV might build on Cadillac's gains from the larger SRX sport-utility vehicle, which increased U.S. sales 11 percent last year. BMW's redesigned X3 helped the company displace Lexus, which had held the top ranking among luxury brands in the U.S. for 11 years.

GM hasn't decided yet on a small Cadillac SUV, McNeil said.

"The fact that Cadillac is becoming more of a global brand will certainly play a role in that decision," he said.

Cadillac's new ATS sedan is scheduled to go on sale in the third quarter. Monthly lease prices play a big part in the sale of compact luxury cars, with BMW and Mercedes advertising deals for the 3 Series and C-Class as low as $299 and $349, respectively, on their Web sites last month.

"We have to be as good as or better than our main competitors," McNeil said. GM reduced Cadillac fleet sales, which were mainly to rental car companies, by 33 percent last year as part of an effort to improve the brand's resale values, he said.

Cadillac plans to have fleet sales down to no more than 5 percent of sales, from 10 percent last year, McNeil said.