NEW YORK – Unveiling the ’05 Cadillac STS at the New York International Auto Show, Cadillac General Manager Mark LaNeve says he expects to sell 30,000 of the new rear-drive flagship sedans annually.

LaNeve expresses confidence that Cadillac will compete with the German luxury brands more forcefully with the STS, while declining to predict how close Cadillac's volume can get to the Mercedes and BMW brands.

Cadillac STS is brand’s first rear-wheel drive in 25 years.

"It depends on how aggressive the want to be (in price)," he says. "We're in the mix now. It wasn't so long ago when they were smoking us."

Pricing for the STS will make the car a better value than competing Mercedes and BMW models, he says. The average transaction price for the V-6 model will be about $45,000, and $52,000 for the V-8.

"It's very good compared to the competition,” says LaNeve, who expects 90% of STS sales to be equipped with a V-6. "That's where the segment is, and we're running like the rest of the segment.”

Although he is bullish on European sales, he says not having a diesel for the STS cuts it out of 50% of the market. "Our target for Europe is to do 10,000 Cadillacs by the end of the decade. That compares with a couple of hundred sales there now.”

LaNeve says European Cadillac dealers will be located in prime parts of towns. And although the strong euro has not changed Cadillac's pricing strategy for the STS, it does increase profitability. “A weak dollar helps our business," he says. "It was the other way around for a long time."

LaNeve expects 20% of V-8 STS sales in the first year will be all-wheel drive. Later, AWD will be made available on V-6 models. He says the AWD premium will have an introductory price of $1,900.