Think of the 2016 Cadillac ATS-V sedan and coupe as the second phase of Cadillac's attack on Germany's greatest sport sedans. The first phase started back in 2004 with the original CTS-V. Though plenty fast, the CTS-V was just too bulky to be nimble, which meant it was always playing catch-up with its compact, agile rivals like the BMW M3. But now the top-dog CTS-V has taken its rightful place as a midsize super-sedan, a gap has opened for the new, pint-sized ATS-V to fly Cadillac's flag in the face of M3 and friends.

Available as a coupe or sedan, the new ATS-V is designed to go toe to toe with BMW's M3 and M4.

The regular ATS has been out for a few years now, and we've lauded its capable handling. The ATS-V has made it even more exceptional. GM's much-lauded Magnetic Ride Control adaptive dampers come standard, providing supreme composure when you're blasting around a racetrack and impressive compliance when you're traversing uneven urban streets. And now that those dampers (along with various other sport-tuned components) are paired with a properly compact car, Cadillac has all the ingredients for a no-excuses performer in this segment.

Of course, if you want to compete with Germany's finest, you've got to pack some serious hardware under the hood, too. Those hoping for a V8 may find the ATS-V's standard twin-turbocharged V6 a bit disappointing, but only until they get behind the wheel. Borrowed from the hot-rod CTS Vsport, the 3.6-liter V6 pumps out 464 hp in this application, outpacing the M3's twin-turbo inline-6 by 39 horses (and the Vsport's version by 44). Per Cadillac's estimates, it'll get you to 60 mph in under 4 seconds. That's quick enough to get any enthusiast's heart pumping.

As rewarding as the ATS-V's diminutive dimensions can be on the road, they're less helpful when it comes to versatility. The Caddy has one of the least accommodating backseats among cars of this type, and its trunk is similarly compromised. Also, the standard touch-based CUE interface can be slow and unintuitive at times; we feel it's generally outclassed by the competition. These are real-world shortcomings that merit close review by prospective buyers.

If you're looking for ATS-V alternatives, they're mostly the usual suspects. The BMW M3 sedan and M4 coupe offer competitive performance and more interior space, while the Mercedes-AMG C63 boasts a richer cabin environment and a twin-turbo V8. A new arrival with all-natural V8 power is the Lexus RC F coupe, but it lacks both a four-door variant (for now) and the Cadillac's nimble feel. Ultimately, if you can make peace with the 2016 Cadillac ATS-V's few foibles, you're going to love the thrills you get for the price.

The 2016 Cadillac ATS-V is a high-performance compact luxury car offered as either a five-passenger sedan or a four-passenger coupe. Both come in a single well-equipped trim level.

The new 2016 Cadillac ATS-V comes in just one trim level, but various options packages are available.

Standard features include a carbon-fiber hood, 18-inch alloy wheels, Brembo performance brakes, a sport suspension with adaptive suspension dampers (Magnetic Ride Control), an electronic limited-slip differential, adjustable driving modes, heated auto-dimming mirrors, automatic headlights, front and rear parking sensors, a rearview camera, remote ignition (automatic transmission only), keyless entry and ignition, ambient interior lighting, dual-zone automatic climate control, leather upholstery, heated front sport seats (with power side bolsters and manual thigh extensions), a power tilt-and-telescoping steering wheel and driver memory settings.

Note that the sedan gets a fixed (non-folding) rear seatback by default, while the coupe comes standard with split folding rear seatbacks.

Standard electronics features include OnStar (with 4G LTE connectivity and WiFi hotspot capability), Bluetooth phone and audio connectivity, wireless cell phone charging, a 5.7-inch color driver information display in the gauge cluster, the Cadillac User Experience (CUE) infotainment system (including an 8-inch central display, voice controls and Pandora Internet radio integration) and a Bose audio system (seven speakers for the sedan, nine speakers for the coupe) with three USB ports, an SD card slot, an auxiliary audio jack and satellite radio.

A few options packages are available. The Carbon Fiber package adds carbon-fiber exterior trim and a body-color rear spoiler. The Luxury package adds xenon headlights, an upgraded Bose surround-sound audio system (10 speakers for the sedan, 12 speakers for the coupe), a 110-volt power outlet, a navigation system and (for the sedan) split folding rear seatbacks. The Safety and Security package (requires Luxury package) adds additional anti-theft measures, automatic high beam control, automatic wipers, a head-up display, lane-departure warning, lane-departure intervention, blind-spot monitoring, rear cross-traffic alert, forward collision alert and (for the sedan) rear side airbags.

The Track Performance package includes the Carbon Fiber package, though it cannot be ordered with the Luxury package (and therefore the Safety and Security package is out, too). It adds the navigation system, a performance data and video recorder (enabling high-resolution, shareable videos of track driving with data overlays) and a low-mass battery. It also deletes the standard carpeted floor mats, tire inflation kit and tow hooks, but these items can be added back via the Protection package.

Additional options include a sunroof (requires Luxury package), red or gold brake calipers, Recaro sport seats and microfiber steering wheel and shift knob trim.

The 2016 Cadillac ATS-V is powered by a turbocharged 3.6-liter V6 engine rated at 464 hp and 445 lb-ft of torque. Rear-wheel drive is standard, while the transmission options are a six-speed manual (including automatic rev-matching on downshifts) and an eight-speed automatic with paddle shifters. According to Cadillac, the ATS-V can accelerate from zero to 60 mph in just 3.8 seconds.

EPA-estimated fuel economy for the ATS-V is respectable, with 19 mpg combined (16/24) from automatic-equipped cars. Manuals earn 1 less mpg on the highway.

Standard safety features for the 2016 Cadillac ATS-V include antilock disc brakes, traction control, stability control, active front head restraints, front-seat side airbags, front knee airbags and full-length side curtain airbags. Also standard is OnStar, which includes automatic crash notification, on-demand roadside assistance, remote door unlocking, stolen vehicle assistance and turn-by-turn navigation.

As noted above, the Safety and Security package adds lane-departure warning and intervention, blind-spot monitoring, rear cross-traffic alert, forward collision alert and rear side airbags for the sedan. However, this package is not compatible with the Track Performance package.

As of this writing, the ATS-V had not been crash tested. In government tests, the regular 2016 ATS sedan came up aces with an overall score of five stars out of five, including five stars for total frontal impact safety and five stars for total side impact safety.

The 2016 Cadillac ATS-V's tidy dimensions, athletic chassis and precise steering make it feel right at home on a racetrack, but that's expected in this rarefied segment. What's surprising is the ATS-V's extraordinary compliance on the street. Thanks to its electronically adjustable Magnetic Ride Control (MRC) suspension dampers, this Caddy can cruise comfortably all day in Touring mode, with Sport and Track modes at the ready if an opportunity presents itself. That's a distinct improvement over the regular ATS with its optional sport suspension, which lacks MRC and serves up a stiff-legged ride as a result.

Finally, the 2016 ATS-V is a Cadillac that wholly matches the performance of the world's best small sport luxury sedans.

As for the turbocharged V6, it's a brute, albeit a pleasantly refined one. There's enough force on tap that you should warn your passengers before you plant your right foot, and even then, you're likely to hear some startled noises. The automatic transmission is smooth and smart, but the manual shifter adds value with its unusual "no-lift shift" feature, allowing you to keep your foot on the gas during gearchanges.

The 2016 Cadillac ATS-V's interior is trimmed with generally upscale materials, including carbon-fiber accents and exposed stitching that help set it apart from lesser ATS models. The available two-tone upholstery adds some spice, too, while the optional Recaro sport seats are a boon in spirited driving, if perhaps a bit constricting in daily use. Certain aspects are a little disappointing (the gauge cluster, for example, has an oddly basic look), but overall we think it's a suitably premium environment.

The V's interior isn't dramatically different from what you'll find in a regular ATS, but the available two-tone upholstery can spice it up.

The standard CUE infotainment interface is more of a hit-or-miss affair. It consists of a beautifully rendered central touchscreen that responds to tapping, swiping or spreading gestures, mimicking smartphones and tablets, while a bank of auxiliary buttons below the screen affords direct access to climate and audio functions. Both the screen and the physical buttons provide "haptic" feedback by pulsing to confirm your touch. There's some pretty cool technology here, but in practice, we've found that the system can be slow to respond, sometimes even failing to register the input at all. Moreover, its virtual controls can seem unintuitive, especially when you're trying to make adjustments at speed. In our experience, most rival interfaces are easier and more gratifying to use.

The ATS-V sedan's backseat is tighter than the norm for small luxury sedans, bordering on cramped for taller passengers. If you plan to use the rear quarters on a regular basis, the BMW M3 or Mercedes C63 may serve you better. The ATS-V coupe's backseat is also smaller than average, but if you're shopping for a two-door car, you may be more forgiving. Either way, trunk space will be at a premium -- 10.4 cubic feet of capacity is subpar for the class.