General Motors have spoken before about making the ATS good enough to rival what Europe can throw at it, and for it to be mentioned in the same utterance as the M3, is already a pretty bold claim.
It is most likely that the ATS-V will wield an upgraded version of the 3.6-litre twin-turbo V6 engine that produces 414bhp in the larger CTS, which should be more than adequate to put up a fight against the BMW in terms of speed at least. The ATS-V also has a muscular body kit and quad exhausts for showing off, but additionally stiffer suspension, better brakes and a limited slip differential will all very much appeal to a European market.
Furthermore, the possibility of equipping the standard ATS with a four-cylinder engine and right hand drive also gives potential for Cadillac gaining a foothold in the European marketplace. Dates have not, however, been released for this yet despite this being spoken of previously.