We've known for a while that Cadillac plans to expand its line-up with new models including a smaller than the CTS entry-level sedan, and by doing so, target the likes of the BMW 3-Series and Mercedes C-Class.

Today, General Motors announced the new small Cadillac will be built at the Lansing Grand River assembly plant. The company said it plans to invest $190 million for this purpose, which will result in the creation of 600 jobs and the addition of a second shift.

"America's fastest-growing luxury brand this year is about to get even more competitive with the addition of an all-new small luxury car," said GM Chief Executive Officer Dan Akerson. "This investment demonstrates GM's commitment to Cadillac and to a strong U.S. manufacturing base."

In a telephone interview for Autonews, Cadillac spokesman Nick Twork confirmed that the car will be a direct rival to the German competition. "We will have a car positioned below the CTS in our lineup to compete with the BMW 3-Series and Mercedes Benz C-Class" Mr. Twork said.

However, those were the only details Mr. Twork would provide, as he wouldn't reveal the new model's name, nor a launch date.

That leaves us with the rumored 2012-2013 time frame for the introduction of the smallest rear-wheel drive Cadillac.

Source: Autonews & GM