To compete globally with luxury brands such as Mercedes-Benz, Audi  and BMW, Cadillac knows it needs to choose its battles carefully. Without a diesel engine offering in the current lineup, Cadillac knows it can’t go head to head with established brands in  Europe, so it’s looking to China for short-term growth.

Long term, however, Cadillac will need a clean-diesel engine (or choice of clean-diesel engines) to successfully compete with existing premium brands in Europe. As of 2014, new European emission regulations will make the E.U. as strict as the United States for diesel emissions, making it possible (and economical) to build a diesel engine that meets both U.S. and European emission standards.

In other words, the timing will soon be right for Cadillac to re-introduce a diesel engine into the United States market. Luckily, many consumers have forgotten about Cadillac’s diesel offerings of the 1980s, which proved to be unreliable, noisy, dirty and underwhelming in terms of delivered performance.

It’s the performance characteristics of modern turbodiesel engines that make them well-suited to the luxury market, and as Cadillac’s VP of marketing, Don Butler, explained to Automotive News (subscription required), “(Diesel) could be a potential hedge in the U.S. because of diesel’s great torque, great performance with great efficiency.”

Butler went on to clarify Cadillac’s position by saying, “We absolutely mean it when we say we aim to compete with the best of the best without compromises.”  

Doing so will require Cadillac to offer a world-class diesel engine (or engine family) across its product line. We’d expect to see an initial offering no later than the 2014 model year.