Once the icon of American automotive luxury, style and performance, Cadillac had fallen on hard times by the late 1990s.

In 1998, Cadillac was displaced as the top-selling luxury car brand in North America after leading the segment since 1950.

As recently as the fall of 2001, Bob Lutz, vice-chairman of Cadillac's parent company, General Motors, was bluntly saying, "If you look at [Cadillac] buyers today, they're falling off the end of the demographic table."

To reverse the sales slide and attract younger buyers, Cadillac has launched three striking new models in the last 18 months: The CTS, SRX and XLR. There has also been the CTS-V higher-performance sedan and a new Canadian-built, V-6 engine for the CTS, as well.

And coming this fall is the replacement for the discontinued Seville, the STS. Cadillac, it seems, is no longer stumbling.

But stumble is the perfect word to describe what it did from the early 1980s into the late '90s:

The 1982 Cadillac Cimarron was a rebadged Chevrolet Cavalier economy car; the convertible Allante, offered from 1987-93, was plagued by quality woes; the 1992 Seville was a large front-wheel-drive sedan competing against sexier rear-drive sedans; and the 1997 Catera lacked the style, performance and road manners to be a legitimate rival to the BMW 3 Series and Mercedes-Benz C-Class.

By late 1997, GM design chief Wayne Cherry and then-Cadillac general manager John Smith took a bold step. They chose to have Cadillac reclaim its reputation for avant-garde styling and combine it with the latest technology. Today, Cadillac uses the tagline "Art & Science" to describe its new products.

With that vision in place, GM set about loading up the product pipeline. The hard work and bold steps appear to be paying off. Last year, Cadillac sold more than 200,000 vehicles in North America, the division's best performance in years and a long way from the 170,000 or so sold in 1996.

For 2004, sales are tracking even better. Cadillac still has a long way to go before it matches its record sales of 350,813 in 1978, but overall the division is healthy and heading in the right direction.

"This is a product-driven renaissance," Cadillac general manager Mark LaNeve said at this year's New York Auto Show. "We made a big bet with a new design and that our engineers could deliver world-class vehicles. That's starting to pay off for us, but we fully realize we have a lot to do. We must execute the plan over time and with the next generation of vehicles."

Cadillac's next challenge is to launch an all-new 2005 STS high-performance luxury sedan this fall. That will be followed early next year by an updated version of its best-selling car, the DeVille.

Both cars take on more of the division's edgy new design cues, albeit in a more conservative way for the DeVille.

The DeVille, to be renamed the DTS, will remain a front-wheel-drive car, however, the STS moves from front-drive to the rear-drive Sigma architecture of the CTS and SRX. The STS will also be available with all-wheel drive. "The STS will be bigger than most of the cars in its segment," LaNeve said.

Cadillac is planning both V-6 and V-8 engines for the STS. The 3.6-litre V-6 will be available with 255 horsepower, while the 4.6-litre Northstar V-8 will top out at 320 hp in both rear- and all-wheel-drive configurations.

Both engines incorporate variable valve timing and are mated to a five-speed automatic transmissions with Driver Shift Control. Pricing has yet to be announced, but expect a fully loaded model to run into the mid- to high-$70,000s.

Jim Taylor, chief engineer of GM's Sigma family of vehicles, says the STS has been engineered to run with the best luxury cars in the world, both in terms of performance and in craftsmanship.

"We feel very comfortable calling this a finely crafted car, but we also realize that's the price of entry into this category," he said.

The engineering story

The head of General Motors' performance group, Mark Reuss, takes his job of hot-rodding GM models very seriously. He's not after just raw performance, but also the halo affect these high-performance derivatives create for the whole GM lineup.

So when the CTS-V project came along, it got his full attention.

"Cars like BMW's M Series and Mercedes's AMGs provide a strong halo effect for their brands," Reuss says. "But you have to do them correctly, or else you risk losing respect."

The first challenge for Ruess's group: Shoehorn the Chevrolet Corvette's LS-6 V-8 engine into a bay designed for a V-6. The solution was to shorten the dipstick and move the accessory drive about 38 millimetres.

Then, the engineers installed a new induction system to maximize engine breathing and a new, dual exhaust system to reduce back pressure. Together, the intake and exhaust generate a grumbling engine note reminiscent of the golden age of American muscle cars.

Other engineering upgrades: A larger prop shaft, a different new rear axle and rear-suspension supports designed to handle the engine's added torque. The suspension has 27-per-cent stiffer springs.

The standard, all-season CTS tires have been replaced by high-performance 245/45 W-rated run-flats. There's no spare shipped with the car. The four-piston Brembo brakes are 355 mm up front, 365 mm at the rear.

All told, the CTS-V's upgrades add up to a curb weight of 1,744 kilograms, versus the base CTS's 1,618. Not as much heft as you might expect and you certainly don't feel it on the road.

As for visual cues, the CTS-V has a "V" badge on the left side of the trunk and the bright chrome mesh that replaces the base car's egg-crate grille. Up front, there are large engine intake ports, as well as brake cooling ducts below the front fog lamps. At the side, unique rocker panels enhance the performance look.