Cadillac knows its future lies in small cars, especially if it wants to be considered a global player, but for now officials are being coy about what they have in store. What we do know is that Cadillac will be replacing the poor selling BLS range with a new model around 2010. This won’t be the new RWD baby Caddy that’s been hyped in recent months but will instead be a low cost model based on GM’s Epsilon II architecture, and could potentially be built in the U.S. or Mexico. Unlike the current Europe-only model, the next-gen version will be a global model according to GM product czar Bob Lutz.

Following the launch of the new BLS will be the Mexican-built BRX midsized crossover also due in 2010 as well as the replacement for the STS. One year later will see the launch of the larger SRX crossover and next-gen Escalade SUV. Officials are doubtful of a replacement for the XLR luxury sports convertible but the option hasn’t been ruled out.

The car on everybody’s lips, however, is the new Alpha-based Cadillac 1-series rival. Likely to be called the ‘ATS,’ the entry-level Cadillac is scheduled to arrive in late 2011 and will feature a RWD powertrain developed by Holden. The platform was first displayed in the Torana Concept (pictured) by the Aussie division back in 2004. Speaking with GoAuto, Bob Lutz described the car as being “about the size of a BMW 1 Series – maybe just a tiny bit bigger to enable larger wheels.” He was also quick to note that design work and engineering are still in the early stages as developers are waiting to see how the new CAFE standards pan out.

GM has announced this morning its plan to produce the Cadillac ATS at its Grand River Assembly Plant in Lansing, MI and a $190M investment to go along with it.

Good timing then that an early prototype of the Cadillac ATS was just spied. Using a Cadillac CTS body shell for disguise, this ATS rides on the smaller Alpha platform and as clearly seen, the front and rear axles have been moved towards the middle of the chassis on this mule. The fuel filler door has also been moved towards the center by several inches.

Where this car differs from the others already spied is the presence of dual exhaust tailpipes. Previously spotted mules have only had a single exhaust. The dual exhaust likely indicates a 6 cylinder engine under the hood.

Riding on GM's new Alpha chassis, the ATS has been described as a smaller CTS-like vehicle. GM intends it to be a true competitor to the BMW 3-series, Audi A4, and Mercedes Benz C-Class.

Powertrain-wise, the ATS is speculated to get GM's 2.0L turbo-charged 4-cylinder. The 3.0L V6 or the 3.6L V6 (or maybe both) should also find its way into the ATS.

It's also speculated that the Cadillac ATS sedan is slated to start in July of 2012, followed by the coupe in July of 2013. If we had to guess, we'd put the pricing in the high 20's to low-mid 30-thousand range.