American automotive manufacturer General Motors (GM) has thrown down the gauntlet to reigning luxury brands in the market like German companies BMW and Mercedes Benz, by unveiling its compact Cadillac ATS sports sedan.

The sedan was launched at the 2012 Detroit Auto Show and GM is hoping that the sporty image of its car will be enough to win the hearts of its younger customers.

While launching the car, GM's Chief Executive Officer (CEO), Dan Akerson, emphasized the fact that the new Cadillac was a central element of the company's global growth strategy, particularly in China.

The company also said the ATS would roll out in three different engine sizes, along with the choice of manual and automatic transmissions. In addition, the car will also be available in four-wheel and rear-wheel drive configurations.

The vehicle's interiors will be made from superior quality materials and will incorporate the new Cadillac User Experience (CUE) infotainment system, with the touch-screen interface found in today's smartphones.

The American automotive giants stopped production of its Cadillac range some 25 years ago, following which brands from Germany and Japan firmly established themselves in the markets.]

However, according to the Wall Street Journal, the ATS, while ready to challenge the BMW 3-Series, will not be met lying down. The Bavarian company is also expected to unveil a new model at the show, which will compete against Mercedes' C-Class and the Audi A4.