Cadillac's Stellar CTS

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The previous CTS sold better than expected, topping out at over 61,000 units in 2005, and the new version of the car is off to a fine start. With 2008 models hitting the showrooms, U.S. sales of the CTS soared 73.5% in September, to 6,416. But for the first nine months of the year sales fell 11%, to 38,080, after having dropped 10.8% in the 2006 calendar year.

If the 2008 continues to sell well, the CTS could rival the Mercedes C-Class, sales of which jumped 14.9%, to 42,236, through the end of September. But it has a long way to go before it catches the BMW 3 Series, which saw its U.S. sales jump 22%, to 106,558 through September.

A big problem for Cadillac is its continuing lack of youth appeal. The average buyer of the 2008 CTS is 55, according to the Power Information Network (PIN), compared with 49 for the Lexus GS Series, 48 for the Mercedes C-Class, 44 for the Audi A4 and Infiniti G35, and just 43 for the BMW 3-Series.

Behind the Wheel

There's no trace of Cadillac's traditional, boat-like ride in the new CTS. Just about every aspect of the car's suspension, braking, and steering systems has been upgraded to provide a sportier, more responsive ride.

The 2008 feels more tightly glued to the road than the Cadillac CTS-V I test-drove last year (BusinessWeek, 8/2/06)>. It has a wider track, and its front/rear weight distribution is a nearly perfect 51%/49%. At 3,845 pounds with rear-wheel drive, it's also several hundred pounds heavier than the old CTS and more than two hundred pounds heavier than a BMW 335i.

That helps make acceleration more sluggish than I expected. GM says the new CTS will jump from 0 to 60 in 5.9 seconds, a time Car and Driver magazine has matched. A GM spokesman says the company has timed even all-wheel-drive versions of the CTS like my test car in 6.3 seconds or so, but I consistently clocked it at only about 7.5 seconds.

By contrast, I clocked the BMW 335i at 4.8, the Infiniti G35 Sport in 5.5, the BMW 328i in about 6, and the new Mercedes C350 in 6.2. If speed is your priority, wait for the new V8-powered CTS-V, which is expected out in about a year.

The CTS's interior is beautiful, with elegant wood trim on the doors and wood and stitched leather on the dash. GM designers even had the confidence to add whimsical touches such as the lopsided instrument readouts at the sides of the center console that look like something from a Pixar cartoon. The CTS also has a tad more legroom than most of its rivals, and a slightly bigger, 13.6 cubic foot trunk.

I'd like to buy a CTS just to gain access to its entertainment and navigation system. It includes a multidisk CD player;, AM, FM and satellite radio; and an iPod hookup—all plugged into a 10-speaker Bose surround-sound system backed up with a 40 gigabyte hard drive. You can operate your iPod (or other player) via controls on the navigation system's touch screen. And the hard drive has a Tivo-style feature that records up to an hour of programming at the push of a button, even after you've left the car.

Buy It or Bag It?

The 2008 CTS faces stiff competition from numerous, wonderful, entry-level luxury cars. To me, the BMW 335i and less expensive BMW 328i are the classiest entrants, but there's nary a dog in the bunch.

You won't save money by going with the Caddie. The average selling price of the 2008 CTS so far is $40,187, according to PIN, higher than for the Acura TL ($34,926), Audi A4 ($35,980), Infiniti G35 ($35,304), and Mercedes C-Class ($36,852). At an average $42,026, only the BMW 3-Series is more expensive. (Power Information Network, like BusinessWeek, is a unit of The McGraw-Hill Companies (MHP))

One reason the 2008 CTS is pricey is that, according to GM, more than one-third of buyers nationwide and two-thirds in the Northeast are taking all-wheel drive, which wasn't offered on the old CTS.

Whatever options they choose, many buyers will be nagged by doubts about whether a Caddie can really be worth as much as a BMW, a Lexus, or a Mercedes. In the case of the CTS, I think it is.

Click here to see more of the 2008 Cadillac CTS.

Thane Peterson reviews cars for BusinessWeek.com.