General Motors might have its hands full getting its North American operations into order and profitability, but signs are it won’t ignore other potentially lucrative areas of its world-wide business.

Witness secret plans AutoWeek uncovered for a new rear-wheel drive entry-level Cadillac slotted beneath the European price leading BLX model. The BLX is a front-drive sedan built by Saab in Sweden and sold throughout Europe.

According to GM product czar Bob Lutz this new small Caddy is among a throng of proposals before the corporation as an internal study aimed at widening Cadillac’s brand appeal and sales potential. This comes following steps taken earlier in the year to raise the profile of GM’s flagship division across Europe.

Lutz points to the popularity of that market segment as a reason why GM is considering a move down market. Such a car would compete against the Audi A3, BMW 1-Series and Mercedes-Benz A class.

“The BMW 1-Series has been extremely well accepted in the market place and shows what can be done when you do things right,” Lutz told AutoWeek at the Paris motor show. “We are investigating the possibility of a new four-cylinder model. Nothing is signed off but we’re working [on it.]”

Lutz won’t cite specifics on the proposed entry-level Cadillac. However, he hints heavily that it will boast a longitudinally mounted engine and rear-drive layout similar to the BMW—itself reliant on the 3-Series in terms of mechanical make-up.

“We’re looking at the possibility of rear-wheel drive, but nothing is decided. [This configuration] provides the best possible basis for agility” he said of such a car’s road manners.

Without an existing rear-drive platform, speculation is that GM will green-light an all-new structure for a range of new models, including a rear-drive successor to BLX.

Lutz rules out the possibility of Cadillac using a shortened Zeta platform. Those underpinnings are on the new Holden Commodore in Australia, and are planned for the coming Pontiac Grand Prix successor as well as the re-born Chevrolet Camaro due in ‘09. “It doesn’t make good engineering sense to make a large platform and go down. You never really get rid of the weight properly,” he said. Such comments have focused attention on the Holden Torana TT36 concept, a car based on an unnamed rear-drive platform and similar in size the BMW 3-Series, displayed in 2004.

Though Lutz won’t confirm as much, it appears GM might rely on its Aussie outpost to again engineer a new platform on which a generation of models will ride. Holden held point for the Zeta structure which received praise from Lutz, who called the Commodore “the best car GM has ever done” in Paris.

Adding further to speculation, Lutz contends a new platform would not only be required to support a rear-drive configuration, but four-wheel drive as well.

The Cadillac Cimarron is widely regarded as one of the worst mistakes in automotive history, but General Motors’ luxury brand is hoping to side step any comparisons as it develops a new four-cylinder, rear-wheel drive sedan for launch in 2010, a new report finds.

The new sedan is set to hit the U.S. market in 2010 as a 2011 model, but its final powertrain offerings remain up in the air. A four-cylinder will definitely be part of the mix, but there is still an internal debate within Cadillac if the new small sedan should be available with a six-cylinder engine.

“There is a big debate as to whether it is four only. I think that is a bridge too far,” Cadillac General Manager Jim Taylor told Automotive News. “There is a piece of the team who is thinking, ‘Well, with this whole fuel economy and gas thing, we ought to go all the way, say, to fours.’ We are resisting that at this stage.”

Some within Cadillac argue that the typical Cadillac buyer isn’t willing to sacrifice power, even if gas prices are near record highs. Taylor even added that he doesn’t think “Americans are going to become un-American that fast.” However, newly passed CAFE regulations take effect in 2011, so Cadillac has to keep a close eye on fuel economy.

And with a new focus on turbocharging within the industry, it’s completely possible to get six-cylinder power out of a four pot engine. For example, GM’s 2.0L turbocharged and direct injected four-cylinder makes 260 horsepower and 260 lb-ft of torque, which would provide more than adequate performance in a small sedan.

Whatever powertrain offerings Cadillac decides to go with, the new sedan will slot below the CTS and will likely draw second looks from BMW 1-series shoppers. GM hasn’t decided on a name for the new sedan yet, but the European BLS nameplate appears to be the front runner.

Cadillac today introduced the Urban Luxury Concept, a design study exploring a new type of vehicle that offers a luxury experience in a diminutive size. The Cadillac Urban Luxury Concept complements its compact dimensions with the design, features and technology for which Cadillac is known.

“The Cadillac Urban Luxury Concept celebrates its scale with intelligent, innovative content that makes it unique regardless of its size,” said Clay Dean, Director of GM North American Advanced Design and Cadillac Brand Champion. “It has a small exterior footprint, but is roomy inside.”

Conceived and designed in the Los Angeles area, where tight, confined parking areas for apartments, office buildings and even suburban homes are part of everyday driving, the concept weaves Cadillac’s iconic design elements into a form that eschews conventional vehicle design to answer the needs of those metropolitan motorists.

Comparable in size to popular city cars found in Paris, Shanghai and London, the Urban Luxury Concept demonstrates a departure from conventional vehicle design. It seats four, with easy access to all seats available via a pair of scissor-type doors that extend outward and rotate forward when opened. The design fosters a roomy passenger area, which is trimmed in exquisite materials and features next-generation interactive technology. Touch-pad screens and projected readouts take the place of most traditional gauges and serve as the audio and climate system controls – a design feature that helps open up the interior for greater passenger space.

“While small in size, this concept is an exploration of what Cadillac could be in the future, as the brand continues to focus on redefining industry standards for advanced vehicle design and integrated technology,” said Don Butler, vice president for Cadillac marketing.

Engineers have developed a concept hybrid propulsion system for the Urban Luxury Concept that includes a turbocharged 1.0L three-cylinder engine employing electric assist technology, engine start-stop function, brake energy regeneration and a dry dual-clutch transmission. Based on extensive prototype and production experience, a combination of these technologies could offer projected fuel economy of 56 mpg in the city and 65 mpg on the highway, in a vehicle of the size and configuration of the Urban Luxury Concept.

A new scale of Art & Science

As a strong example of form following function, the unconventional body style maximizes passenger space and makes a technology statement. At the push of a button, the large, scissor-type doors push away from the body and rotate in a seamless, elegant motion. A large aperture allows for effortless entry and exit– particularly in tight city parking spaces.

“This is a new vision in vehicle design that was created to answer the needs of city dwellers,” said Frank Saucedo, lead designer. “The door design is purposeful and technologically advanced, which is the essence of how we’re taking Cadillac into the future.”

The Urban Luxury Concept’s design is marked by a sharp profile, supported by forward-sweeping body lines that combine to suggest motion even when the vehicle is stationary. The 19-inch wheels are pushed to the edges of the body – a design that creates almost no overhangs, leaving more space inside. In fact, the car’s wheelbase is 97.1 inches (2,467 mm), but the overall length is only 151 inches (3,835 mm). The interior room is bolstered by a wide, 68.1-inch (1,730 mm) stance and 56.9-inch (1,446 mm) height.

“It may not look like Cadillacs on the road today, but it shares the comfortable and high-tech elements that owners have come to associate with larger, traditional luxury sedans,” said Saucedo. “As more customers demand premium features even in smaller vehicles, a vehicle like the Urban Luxury Concept could be a solution.”

Technologically advanced interior

A large windshield and twin skylights create an open, airy feeling and enhance the perception of spaciousness inside with seating for four. A minimalist approach blends with refined materials, colors and lighting. These elements combine to create a passenger space that conveys the new perception of luxury: small, exquisitely detailed and fitted with the latest in digital technology. The front row passenger seat slides and reclines to offer a relaxing seating position. When folded flat, the seat’s rear panel offers modern parents a conveniently integrated Orbit Baby SmartHub™ docking station within reach.

“There is no minimum size for a Cadillac driving experience. The Urban Luxury Concept’s interior reflects the ‘smaller is better’ aesthetic that permeates the world of technology,” said Saucedo. “And while this design philosophy reflects what’s going on in the world around us, it also has a more practical use when it comes to the Urban Luxury Concept: It creates more interior space.”

The conventional “center stack” of controls is replaced by a divided interface that creates more space at the forward section of the interior. A pair of projected readouts flanks a large, prominent analog speedometer reminiscent of a high-end time piece, assisted by a high-definition head-up display. Capacitive multi-touch switches throughout the interior ensure seamless and intuitive electronic control.

The technology behind the unique touch pad controls is ergonomically tucked around the steering wheel to deliver real-time feedback for an efficient commute. The right-hand touch pad is hidden until deployed or detached by the passenger, who can interact online without compromising the driver’s control. Via the on-board network, a passenger can request destination directions or audio playlists be integrated in the driver controls. Also woven into the system is OnStar with advanced voice recognition interaction, which allows the driver to do more without taking his or her eyes off the road or hands off the steering wheel.

Befitting its role as a Cadillac, the Urban Luxury Concept’s interior materials convey luxury through quality and advanced technology. Blue and grey leather dominates the interior space and is contrasted by fabric selected for its high-tech look and feel, and usually found in couture fashion. It is used on the seats, as well as parts of the instrument panel and door panels.

The interior is finished with carbon-color wood inlays, brushed aluminum accents and ceramic materials. Ambient lighting conveys an upscale aura that is complemented by the ultra-modern Tanzanite glow of the touch-screen displays.