Cadillac’s new small ATS sedan was designed to challenge the BMW 3-series, Audi A4 and Mercedes-Benz C-Class. This sporty four-door sedan needs deft handling, road-gripping performance and a high level of interior craftsmanship to be competitive.

Earlier this week at the North American International Auto Show in Detroit, Cadillac’s efforts were rewarded when the ATS was named North American Car of the Year by a jury of 49 automotive journalists. Finalists included the Honda Accord and Ford Fusion.

The test car was an ATS Luxury model with the base 202-horsepower, four-cylinder engine and a six-speed automatic with a manual-shift mode. The base engine is a tad noisy at full throttle and not all that powerful. Acceleration is sprightly but not quick. I found this configuration to be comfortable, agile and nicely equipped but it lacked the performance and handling of a 3-series, an A4 or a C-Class. Plus, its out-the-door price of $41,375 seemed a bit steep for the base engine.

The front-engine ATS is available in rear-wheel or all-wheel drive. I would choose all-wheel drive for our climate.

Base prices start at $33,095 and top out at $47,995 for the all-wheel-drive Premium model with a 321-horsepower V-6. A turbocharged, 2.0-liter four-cylinder with 272 horsepower is also available.

The ATS rides on an all-new platform that has a nearly identical front-rear weight distribution that benefits handling. The 109.3-inch wheelbase is 2.4 inches shorter than that of the XTS. The five-link, independent rear suspension is made from high-strength steel. The optional FE3 sport suspension with magnetic ride control has driver-selectable modes. The magnetic ride control does an amazing job of delivering a smooth ride without sacrificing handling prowess, thanks to its ability to react to road conditions in milliseconds.

For many folks, the ATS is just the right size, although rear-seat legroom is pretty snug. Other than that, it is small enough to be maneuvered easily yet large enough to give the driver and passenger some elbow room. Trunk space is decent and the back seat folds down for added cargo space.

Exterior styling reflects Cadillac’s somewhat angular Art and Science design philosophy. The body panels fit like a well-tailored suit that is more conservative than radical. It looks like a smaller version of the XTS, except I think its proportions are more visually pleasing.

The test car’s interior was most handsome. The seats were dark red while the rest of the cabin was black. Shiny, piano-black panels on the center stack, console and steering wheel were ringed with chrome in a tasteful fashion. The gauge package was rather plain by comparison.

The center stack is home for CUE, or Cadillac User Experience. All of the controls are manipulated by touch, but I found it to be frustrating at times. I like to be able to grab a knob and change the direction of warm air, or change radio modes, without having to step through a menu system on the touch screen. CUE is better than some systems, and I guess it is the wave of the future, but I still prefer more analog controls.

Dual-zone climate control, Bluetooth and a rearview camera are standard.

The Luxury, Performance and Premium models have Brembo front disc brakes. Anti-lock brakes, traction control and vehicle stability control are standard. A hill-holder helps keep the car from rolling back when starting on a slope.

Driver and passenger have front, side, knee and side-curtain airbags.

Price

The base price of the test car was $37,590. Options included navigation, CD player, Bose surround-sound stereo, Thunder Gray Chromaflair paint, heated front seats and a heated steering wheel. The sticker price was $41,375.

Warranty

Four years or 50,000 miles, with a six-year, 70,000-mile powertrain warranty.