And the new high-performance Cadillac CTS-V can compete with the best high-performance sports sedans in the world at a much lower cost.

Fresh from being completely redesigned and re-engineered for the 2008 model year, the CTS boasts responsive handling and excellent high-speed stability, yet it's smooth and quiet around town or cruising on the highway.The ride quality strikes a perfect balance between smoothness and handling.The steering is accurate, with good feel and a nice, weighty demeanor.The car feels solidly put together and quiet.Inside is an attractive cabin trimmed with nice materials with an airy, open feel.Everything is easy to operate.Simply stated, the Cadillac CTS is a very enjoyable car.

The CTS and CTS-V feature sophisticated suspension systems developed, among other places, at the world-famous Nurburgring race track in Germany.Called the Nordschleife, the 14-mile northern loop of what was the old Nurburgring circuit is considered the toughest, most dangerous, most demanding purpose-built race track in the world.A 2009 CTS-V posted what may be the fastest lap at the Nordschleife for a standard production four-door sedan, an impressive feat given the hot rods BMW, Mercedes, Audi and others roll out.To prepare for this lap John Heinricy from GM's performance division simply shifted the automatic transmission into Drive and let it do its thing.

The Cadillac CTS comes with two versions of a 3.6-liter V6 engine, one with conventional fuel injection rated at 263 horsepower, another with Direct Injection rated at 304 horsepower.Both are smooth and responsive, but the Direct Injection engine offers more power and more response with almost no penalty in fuel economy due to its more efficient fuel management.The CTS is available with a six-speed manual or six-speed automatic.

The CTS uses rear-wheel drive, best for performance sedans, but it's also available with all-wheel drive.The AWD uses an active transfer case that normally applies 40 percent of the power to the front wheels, 60 percent to the rear, but in slippery conditions can apply all of the torque to either axle.A limited-slip differential is also available.

The CTS-V has a supercharged 6.2-liter V8 that makes 556 horsepower at 6100 rpm and 551 pound-feet of torque at 3800 rpm; it is available with either a six-speed manual or six-speed automatic, but in rear-drive form only.The CTS-V is a genuinely fast car.Cadillac says the CTS-V is capable of 191 mph and can accelerate from 0-60 mph in 3.9 seconds.We found the CTS-V to be one fast ride at Infineon Raceway in Sonoma, California, nearly as fast as a Sprint Cup car.It rides on the firmer side, like a European luxury sports sedan.

Standard features include leather seating surfaces, dual-zone automatic climate control, OnStar with turn-by-turn navigation, a Bose eight-speaker sound system with CD, MP3 and auxiliary capability, remote keyless entry and programmable central locking, power windows with express-up-down on the front and express-down on the rear, power driver's seat and XM Satellite Radio.

Options include Premium Luxury Collection ($10,050) with a pop-up navigation and audio display, a 10-speaker Bose 5.1 sound system with a 40-gigabyte sound storage system, an iPod interface that will operate your iPod from the touch screen and display artist and title information, 10-way heated and cooled leather seats, split folding rear seats, Ultraview sunroof panel, sapele wood trim, 18-inch alloy wheels, power tilt/telescope steering wheel, remote starting and keyless entry.Most of these features are available in smaller packages.

The CTS-V ($58,575) features a supercharged V8, a limited-slip differential, Brembo disc brakes with six-piston front and four-piston rear calipers, P255/40ZR19 tires in front and P285/35ZR19 tires in the rear, and 10-spoke alloy wheels measuring 9.0 inches wide in front and 9.5 inches wide in the rear.The CTS-V also has distinctive exterior details, including a mesh grille and appropriate badging, to make it stand apart from the normal CTS.The CTS looks clean, elegant and modern, but the CTS-V, with its few changes, takes on a more assertive appearance.

Safety features that come standard on all models include front, side and side-curtain airbags, ABS and Stabilitrak electronic stability control and traction control.Optional all-wheel drive improves safety further.

The taillights, rear quarter panels and decklid also fit the Cadillac theme, and below the rear bumper are exposed dual exhaust tips.Altogether, this is a great looking car, with adventurous lines everywhere, especially in the gracefully sloping rear roof section.

The CTS-V is distinguished by functional features.The power dome hood, distinctive wheel and tire package, and the bold mesh grille suggest an intent for serious driving.The larger mesh grill is for improved airflow.The power dome hood is as small as they could make it.Big brake ducts help cool the big two-piece Brembo calipers.The CHMSL center brake light reduces rear lift.The dual exhaust provides better performance.

We found the comfortable front bucket seats held us down and in place behind the wheel, including some enthusiastic driving on central California's windiest, curviest roads.

We really appreciated the range of adjustments offered by the power seats and the power steering column.The tilt-and-telescope column offers ultimate comfort and proper driving position.The instrument package is complete, easy to read, and graphically pretty.

All-in-all, the interior of the CTS is a very nice to sit and take a drive.The driver is held in, yet comfortably, to properly operate the car, and the passengers enjoy a feeling of ease, confidence and luxury.It's great to see Cadillac offer such a terrific interior.

The AM/FM/XM Bose 5.1 sound system with the 40-gigabyte hard-drive, iPod connector and USB port offers the ultimate in musical enjoyment.Using the navigation screen, it's easy to switch back and forth between the three broadcast and three stored-music formats by simply touching the screen, and the blue display is large enough to be read from the back seat.We think it's one of the best overall, most fun-to-use sound systems we've ever enjoyed in a car.Many other luxury cars have systems that are difficult or fussy to operate.

The CTS-V has a sportier cabin with a steering wheel with a thicker rim available in suede.The dead pedal, allowing the driver to brace the left leg, is optimized for racing.A Recaro option is available with 14-way adjustable seats, including bolsters that can be pumped up for hard driving then deflated for cruising.

The CTS comes with two versions of a 3.6-liter V6 engine, one with conventional fuel injection, rated at 263 horsepower at 6400 rpm and 253 pound-feet of torque at 3100 rpm, and the second, with Direct Injection, rated at 304 horsepower at 6400 rpm and 273 pound-feet of torque at 5200 rpm.Either is available with a six-speed manual or six-speed automatic transmission, and with rear-wheel drive or all-wheel drive.

The difference in performance, feel and sound between the two V6 engines is amazing.The standard engine works well, but the Direct Injection engine just has more of everything; more power, more torque, more response, more driving enjoyment, and at little or no penalty in fuel efficiency.The Direct Injection is a more efficient system.It's also extremely responsive.The 304-hp V6 feels ready to go out and play anytime you want, delivering a really solid combination of power, torque and assertive sound whenever the throttle is opened all the way up.

The six-speed manually controlled automatic is very quick and positive to shift, up or down, with a little bit of throttle blip on the downshifts to keep the drivetrain happy and to keep the tires from skipping and chirping.The six-speed manual offers an easy clutch and requires only a light touch on the shift lever to change gears.The choice is up to your preference.We liked both of them.

Underneath all the attractive sheetmetal is a suspension system with a forward-mounted power rack-and-pinion steering system that pulls, rather than pushes, the steering arms.(It pulls on the steering arm of that front tire which will be on the outside in the turn so, in a right-hand turn, it is pulling on the left-side steering arm, placing that side in tension rather than compression.) The steering is sweet to drive, very accurate, with good feel and a nice, weighty demeanor.

All-wheel drive is optional on the CTS.We found it makes the car feel very stable and adds to driver confidence on winding roads.

The brakes are excellent, equipped with ABS and Electronic Brake-force Distribution.They provide very good stopping power, even for a car that tips the scales at well over two tons.

For all its steering, cornering and handling prowess, the CTS doesn't seem to exact any penalties in quietness or harshness over the road, an impressive combination.It's very solidly put together and, in all other modes besides wide-open-throttle, it's quiet inside, even with its 17-inch high-performance tires.

Driving the CTS-V is a completely different experience.It's not a lightweight, at well over 4000 pounds, but with 556 horsepower and 551 pound-feet of torque, it will not be denied.Yet, it's also perfectly capable of being trundled and idled around town.The clutch is light, the shifter feels just about perfect, the seats are comfortable and, if the task at hand is a trip to the grocery store, the CTS-V can, indeed, do it just fine.It's even fairly quiet, and the ride is not harsh.

On the public roads, it idled smoothly and quietly and responded to throttle inputs unlike any other Cadillac in our experience.Big torque, big power, right now.The huge tires didn’t make very much road noise, but they did provide the kind of cornering we’re simply not used to in a fully equipped, 4300-pound luxury sedan.In combination with those instant-acting shock absorbers and the big tires, the CTS-V felt like a German-style sports sedan, with quick steering and deft handling on the country roads, smooth ride, and massively powerful brakes.

On the track, we found the CTS-V to be a rocket, fast and predictable.We found we could drive it very hard with the confidence that we were still well within our driving abilities.It is a superb car, capable of running against the best sedans from Germany and Japan.

NewCarTestDrive.com correspondent Jim McCraw test drove the CTS in Northern California and the CTS-V near White Plains, New York; with Mitch McCullough reporting on the CTS-V from Sonoma, California.