NEW YORK – Cadillac is looking to sell down about 3,000 DTS units still on dealer lots and less than 900 STS models in inventory before its latest entry, called the XTS in concept version, debuts, likely early next year.

STS production ended three weeks ago, and DTS builds probably will be halted in about three or four weeks, James R. Vurpillat, Cadillac's global marketing director, tells Ward's in an interview here.

Cadillac will replace the two models with an all-new front-wheel-drive car. He declines to specify when production of the new model will begin, except to say “it won't be this fall.”

Once the STS and DTS are dropped from the portfolio, the Escalade fullsize SUV, which bowed in 2007, will be the oldest model in Cadillac's lineup.

But even if Cadillac runs out of its big models before the successor is delivered to dealers, GM's flagship brand is headed for strong sales growth this year.

Cadillac's SRX midsize cross/utility vehicle has vaulted from ninth to second place in its segment, outsold only by the Lexus RX 350/450. CTS sales lag Cadillac's two major German competitors, BMW and Mercedes-Benz.

The BMW 3-Series is far and away the segment leader. But the CTS only trailed the Mercedes C-Class by about 2,200 as of April 30. The CTS outsells the Audi A3, A4 and A6, combined, as well as Asian competitors.

The new big XTS sedan is one of the bookends with which Cadillac is planning to fortify its product portfolio around the hot-selling CTS products. The auto maker announced plans to build a car smaller than the CTS about 18 months ago.

The current-generation STS, introduced in 2005, has been selling at a rate of about 200 units a month, with an average transaction price ranging from $48,000-$50,000. Some 30% of the STS deliveries are lease transactions.

Sales of the DTS, which bowed in August 2005, have been ranging between 800-1,000 units a month, only about 15% of them leased. “We're about a year away from fleshing out our entire product line,” Vurpillat says.

Cadillac reports CTS sales are up 62% for the year, totaling 14,157 units through April. Deliveries last month, alone, climbed 24%. Despite this, the brand only has gained 0.3% in market share for the year.

However, Vurpillat is gratified by the fact the CTS, which is a little larger than its two top competitors, is transacted at average selling prices higher than the Mercedes C-Class and BMW 3-Series, somewhere in the high $30,000 to the low $40,000s.

“The CTS coupe is doing phenomenal business,” he says. Cadillac has been selling 3,000-3,500 CTS sedans per month, compared with 1,200 coupes. Nevertheless, the CTS coupe is the best-selling model in its segment on the market.

Vurpillat also says Cadillac’s V-Series cars have been a critical element in the revival of the brand, accounting for about 10% of its sales. “The V-series puts us in a league with BMW M models and Mercedes-Benz AMG cars. It allows us to compete with the finest cars in the world.”

Some 35%-40% of CTS units are leased. “That’s about 5% below the segment,” Vurpillat says, who forecasts Cadillac's biggest growth opportunity is in the compact luxury segment. “How much growth, I don't know,” he says.

Vurpillat is not ready to discuss any plans for alternative fuel and powertrains. “Our strategy will play out as our portfolio rolls out,” he says, while predicting there will be some smaller-displacement engines.

He also is guarded in discussing Cadillac's opportunities in the ultra-premium luxury category. “Our priority is to get the main segments covered. Then we can start thinking of cars in the S-Class and 7-Series range,” he says, adding, “I'd like to have a car like the concept Cadillac 16.”

Cadillac currently has 950 dealers and “I'm not looking to add or subtract from that amount,” Vurpillat says. “We want to get more dealers to upgrade their facilities.”

Last year, Cadillac exports accounted for slightly less than 20% of the brand's overall sales, half of those in China. The rest were exported to the Middle East, Russia and Europe, as well as Canada and Mexico.

“We would like our export business to grow to 35%-40% of overall sales,” Vurpillat says. Cadillacs are sold in 42 countries now, and he predicts there will be 60 Cadillac dealers in China, alone, by the end of the year. There are 40 in Europe.

Meanwhile, he says the average age of U.S. luxury buyers steadily has gone up over the last five years, while the age of Cadillac buyers has risen at a slower rate. Still, the average age of GM luxury brand buyers is 61, compared with 56 for the segment overall.

Racing plays a big role in Vurpillat's marketing strategy. “Racing helps change the perception about the Cadillac brand. We're going to stay in the racing game and offer a wide range of powertrains (in production cars),” he promises.

One thing Vurpillat definitely rules out is a convertible for this generation of the CTS coupe. “But going forward, we'd like to do one.”