Since taking over the reins at Cadillac last year, Johan de Nysschen has been dropping plenty of hints about the brand’s future. While the hints have tended to focus on new high-end product from Cadillac, of more importance to the brand’s sales performance is the need to fill some gaping holes in more mainstream segments.

Cadillac’s sales were down 6.5 percent in the U.S. in 2014, a year that saw many rivals post record figures. Speaking with Automotive News (subscription required), de Nysschen said a lack of product in two key segments, those of the compact crossover and compact sedan, have hurt the brand’s sales. That’s why he’s made the development of a new compact crossover and new compact sedan a priority.

"It's a big priority,” de Nysschen said of the compact luxury segment. “It's a red-hot market segment right now that's really going through explosive growth."

The compact crossover will come first, arriving in early 2017. It will target the likes of the Audi Q3, BMW X1 and Mercedes-Benz GLA.

About a year later, Cadillac will introduce a compact sedan. This model will be positioned below the small ATS sedan and target newcomers like the Audi A3 and Mercedes CLA. BMW is also working on a similar model, a new 1-Series sedan.

According to de Nysschen, Cadillac’s compact sedan will feature rear-wheel drive to ensure it stands out from rival products, all of which are based on front-wheel-drive platforms. General Motors Company’s [NYSE:GM] Alpha platform, which underpins the ATS and CTS models as well as the next Chevrolet Camaro, will likely feature in the new Cadillac compact sedan.

"The cost and packaging advantages of front-wheel drive are appealing but Cadillac is the challenger brand," de Nysschen said. "We want to build our reputation as a purveyor of high-performance drivers' cars ... so it's better that we do it off a rear-wheel-drive architecture."

The two vehicles are part of a $12 billion investment in new products and technology at Cadillac. Later this year we’ll see an SRX replacement as well as a new CT6 large sedan. Other models in the pipeline include a large crossover with third-row seats, a replacement for the ELR, a proper flagship sedan and possibly even a sports car.


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