Beginning October 1, GM begins its new pricing strategy aimed at making the sticker price closer to the actual transaction price. The first car advertised with GM's "value pricing" is the 2006 Cadillac DTS. I began hearing commercials for it last Saturday. The spot didn't say much about the DTS, but it sure made it clear that it was now "value priced".

The first time I saw the DTS on the road it was in my rear view mirror. I noticed that while it was a Cadillac, it had a different, more distinctive front grille. I moved over one lane and let it pass me. I thought the styling was better than the STS and really quite sharp and new. Unfortunately, it was a rental car.

I went to the closest Cadillac dealer to look at the DTS, but I didn't drive it. I have mixed feelings about the car before I've even driven it. My focus was on the sticker price and the actual "value" perceived.

The DTS replaces the dinosaur Deville Touring Sedan -- already called the DTS, but now the venerable Deville name has been completely exorcised from the Cadillac lexicon. The question in my mind is where this new front-drive Cadillac falls in the Cadillac lineup. On Cadillac's website, the DTS is placed between the CTS and the STS; however, the prices overlap quite a bit. You can get a loaded V6 STS (the flagship?) for less than a loaded DTS with its standard V8. But with the STS you get rear drive and a (more) modern 5-speed automatic compared to the front drive DTS with GM's ancient 4-speed automatic.

The DTS has a base MSRP of $41,990. At this price, without the good option packages, it's hard to call this a "value". I performed a "virtual build" of the DTS on Cadillac's website to see the real price for the kinds of options I would expect on a car costing this much.

At $42k, the DTS is no longer in the "near luxury" category; it's priced to compete with other mainstream luxury V8 sedans. The DTS "performance" package ads a whopping $8,500 to the sticker and you still have to add another $1,795 to get the navigation system. After adding a decent sound and sunroof package and a couple other options, my virtual DTS clocked in at $55,930. That's high enough to hit smack into the entry level for a Mercedes E500 or a BMW 545i and it is nearly the same as a loaded Infiniti M45 or Lexus GS430!

If you drop the German competition down to the six cylinder category -- the Mercedes E350, Audi A6 3.2 or the BMW 530i -- you end up in the same mid - $50,000 price for a nicely equipped German sedan with nearly as much power as the aging 4.6 liter Northstar V8 in the DTS.

I'm troubled by the "value" here. I like the fresh look of the DTS and it has more interior room than its German and Japanese luxury competitors. But you can get a lot of very good German engineering for $55,000 and the copycats Infiniti and Lexus are pretty damn good at what they do for that kind of coin.

I am really disappointed by the ancient front-drive powertrain GM used in the "all new" DTS. I've complained about this before -- that 4-speed GM automatic transmission is older than most of the people at the advertising agency who created the new "value pricing" TV spots. And while the Northstar is one of the more modern engines in GM's catalogue, it's not exactly the latest in engine technology. Sure, it has GM's latest engine management chip; but the basic block and heads are not the cutting edge of engine technology. And it's not like the EPA figures of 17 mpg city and 24 mpg highway are stellar achievements. Perhaps a modern V6 from GM's catalogue would have made a better choice for the debut of the DTS.

The interior is a step up from the usual cheap GM plastic. However, as with all GM vehicles, there are so many cheap touches that it distracts you from the decent stuff. It's also a very low bar to jump over each time GM makes a new interior. The interior may be acceptable to Cadillac's current DTS buyers. In LA, those buyers are primarily livery services, rental fleets and older people who are looking for a big sedan for their extended families. The older buyers are flocking to the Toyota Avalon so it's going to take a lot to retain the base and attract new customers to the DTS. To attract the caliber of buyers who usually buy German or Japanese, the DTS has to offer much better value and a really good driving experience.

I fully admit I love electronic gadgets in cars, as long as they enhance my driving experience and aren't constantly annoying. For example, my friend has a 2002 Range Rover HSE. The parking sensors beep at everything, including while he's in traffic if he is too close to another bumper or even the side wall of a tunnel or parking space. You can't turn the damn beep off and it really gets to be too much.

GM has bestowed the DTS with a host of cool electronics that belong on a luxury car and a couple that are a good value and unexpected at this level of car. The remote entry key fob allows you to start the car from almost 200 feet away so the car has time to start the climate control, radio and other functions before you get to your car. You don't get the "smart key" keyless entry system option, unfortunately. GM's smart key is the size of a credit card and is a good slim fit in your pocket or purse.

The navigation system uses a touch screen and voice recognition technology. Voice command On-Star is standard. I'm not a big fan of On-Star because at $16.95/month plus a calling package, it's an expensive addition to your normal hand held cell phone. I'd rather have good Bluetooth sync technology so that my Bluetooth-equipped cell phone could operate though the car's sound and navigation screen systems. However, I'll give GM credit for finally figuring out how to integrate the satellite radio, GPS, On-Star and terrestrial radio antennas into one roof-mounted fin and discrete in-vehicle installations. It's about five years late to the game, but better late than never.

The DTS uses LEDs in the rear taillights which is leading technology for faster and brighter illumination. The front headlight assemblies are also pretty trick. You get bi-functional Xenon high-intensity discharge (HID) projector beams with automatic operation. With the performance package, you also get IntelliBeam™ which is GM's intelligent headlight system that automatically switches from high to low beam headlights when it senses oncoming traffic. The entire headlight system is coordinated with automatic wipers which relieves the driver from the constant switching functions when driving in bad weather.

You also get heated and cooled front seats with the performance package and Cadillac throws in its magnetic ride control system which should help this car handle better. The performance package upgrades the standard steering to a ZF Servotronic II power rack and pinion system with variable assist. I hope all these nice features help to reduce the inevitable torque steer that comes with a big V8 (292 hp and 288 lb ft torque) and front drive.

I'm trying real hard to find the compelling value in the DTS. If all these goodies were available for the base entry price of $42k, I'd say that it was a pretty good bargain. But the packaging and overall value aren't really there when you take into account the damaged reputation of GM and Cadillac, low residuals, out-dated drivetrain, and very serious and better competition. Just as an example, my Audi A6 blows the DTS away when it comes to interior quality and overall fit and finish.

I think that GM should have made the DTS all-wheel drive. At least the DTS could have appealed to the growing market for luxury awd cars. I've read many articles that tout awd as the preferred drivetrain now and in the future. Audi is known for its Quattro awd system. Both BMW and Mercedes offer their sedans with an awd option. Lexus introduced the GS300x this year to get into the same market. I think GM missed another opportunity to be better positioned in this growing market. The awd feature would go a long way to smoothing out the power of the V8 and is a fantastic selling tool for the franchisees.

Let's look at the American competition to the DTS. There is nothing from Lincoln that directly competes with the DTS. Chrysler offers a fully-loaded Chrysler 300C with Mercedes-engineered rear drive and many of the same options as the front-drive DTS for the same price as the entry-level DTS with very few goodies. Is there any DTS "value" in this comparison? I don't think so.

In the modern age of $3.00 + per gallon gas, more buyers are opting for luxury cars with the smaller engines and more gadgets in hopes of getting slightly better gas mileage over the V8 version of the same car. Modern six cylinder engines coupled with six- and now seven-speed automatic transmissions can deliver V8 performance with better gas mileage. The only engine available in the DTS is the Northstar 4.6 liter V8. The STS has a V6 options and it's much more reasonably priced than its V8 big brother whose price easily soars north of $60k with all the goodies. The DTS seems to make the STS V6 look like a better "value". Is this what Cadillac was looking for? I doubt it.

Here's an interesting example of "value" to consider: The new 2006 VW Passat offers its top-of-the line model with a 280 hp 3.6 liter V6 engine with 4-motion all wheel drive and just about every gadget you could imagine. It's a bit smaller inside and outside than the DTS, but it carries the same number of passengers has a sticker price just shy of $40,000. The VW doesn't have a luxury badge, but in the big picture, the new Passat is very handsome, well engineered with a thoroughly modern drivetrain, direct-injection gasoline engine technology, a nicer interior and almost every luxury option possible for dramatically less than the DTS. If you want value, the Passat blows the DTS away.

The last question is whether either the new DTS or GM's new "value pricing" strategy will make a difference in the Los Angeles market. My answer is "no". I see no real value in the pricing of the new DTS. For the sticker price of a DTS, LA buyers are going to continue to ignore Cadillac and move on to the German and Japanese luxury brands.

Welcome to the rental fleets, Mr. New 2006 Cadillac DTS!