Nobody knows better than General Motors Corp. that if it's to be a major player in the world luxury car market, it's critical for Cadillac to be reinvented. Crucially, Cadillac needs a range of models that not only appeals to traditional American customers but cater equally to international tastes.

That's why Cadillac competed this year at the prestigious Le Mans 24-hour endurance race - although its overall 20th place was a disappointment to executives hoping (perhaps too optimistically) for a podium finish. Like the positioning of its products versus premium European competitors, Cadillac's Le Mans entries simply were underpowered and overmatched.

Now, GM executives confirm the possibility of developing a new-age Cadillac V-12 engine. Cadillac stopped making V-12s in 1937, though there also was a V-16, perhaps the greatest Cadillac ever, from 1930 until 1940.

Plans to re-introduce a V-12 and V-16 in the early '60s came to nothing, because even packing "just" V-8 power, Cadillac outsold its American competition five to one. Caddy still wanted to fit a V-12 for the newly adopted front-wheel-drive (fwd) Eldorado in 1967, but the looming introduction of the U.S.'s first vehicle emissions regulations in 1968 scuttled the idea.

Today, with the global domination of European luxury cars, V-12 engines are mainstay models at Mercedes-Benz, BMW, Rolls-Royce, Aston Martin, Ferrari and, soon, Audi and Volkswagen.

Which GM exec first raised the idea of a new Cadillac V-12 isn't really too important, but it likely was Ron Zarrella, since 1998 the president of GM North America and formerly the executive largely responsible for forging GM's much-hyped branding policy.

"You don't need a hill of beans to know we need a V-12 to be competitive, to position Cadillac," says Mr. Zarrella. "We haven't made a decision, but we're looking hard at it."

So hard, that Cadillac has begun development of a stand-alone V-12 range - one that would be positioned above the existing models.

"We're putting together a program for a V-12," admits Arv Mueller, the boss of all GM's powertrain activities. "If we do it, I'd aim for a 75-degree engine of around 5L to 5.5L."

Mr. Mueller admits that his new multi-cylinder engine shares parts from GM's new-generation DOHC "Premium" V-6 and V-8s - the only way to get the necessary economies of scale to justify building a comparatively low-volume engine. Mr. Mueller also says that a big-capacity V-12 luxury car puts pressure on GM's corporate average fuel economy (CAFE) figure, but by using absolutely contemporary technology - expected to include all-alloy construction, variable exhaust and inlet valve timing, and variable induction - he believes any penalty can be minimized.

GM sources believe the strategy board will green-light the V-12 project later this year, for launch as early as 2004. It's expected to be built over GM's all-new Sigma rear-drive platform, to be launched next year in the CTC, the rear-wheel-drive (rwd) successor to today's Omega-based Catera.

Currently, of course, all U.S.-origin Cadillacs are fwd, and the move to rear-drive is seen as fundamental to elevating the brand's image. Sigma, primarily created for GM's prestige brand, is expected to form the basis for virtually every new Cadillac, including the 2005 replacement for the best-selling DeVille. The exception could be the 2-seat Evoq.

Insiders suggest Cadillac will be teamed with Saab dealers in many markets as it moves to increase international sales to at least 10,000 a year by 2004. There's also a plan for the CTC to share a V-6 turbodiesel engine, probably a new Isuzu unit, with the Saab 9-5. The hangup with that scheme, currently under discussion, is how GM Powertrain engineers can realistically solve the incompatibility between a Saab that demands a transversely located engine, driving the front wheels - and front engine/rear-drive Caddy applications.

The final step in becoming a true global player is a still-secret plan to develop an even smaller Cadillac, a rival for the C-Class Mercedes-Benz.

"We haven't made the decision yet, but the next extension of Cadillac global volumes probably means we need a small vehicle," says Mr. Zarrella. "We're discussing the idea now."

Cadillac says the new small car should, like its BMW and Mercedes competition, be rwd. The main problem, one source claims, is to decide if the packaging engineers can successfully spread the Sigma platform across such a broad size range, from a potential 18-ft. (5.2-m) DeVille down to the new 14.8-ft. (4.5-m) small car.

Le Mans clearly is just the start of Cadillac's push to become a serious player, a marque GM expects to be ranked in image, quality, engineering and style, with Mercedes-Benz and BMW.