DETROIT -- Cadillac President Johan de Nysschen has had about five months since taking over the brand to assess the gaps in his vehicle lineup. He has found a lot of them.
Two in particular, he says, are hurting Cadillac's sales (down 6 percent last year) relative to competitors: the lack of a small crossover, and an entry-level car priced below the ATS to fend off the Audi A3, Mercedes-Benz CLA and others.
He intends to fill those holes.
"It's a big priority. It's a red-hot market segment right now that's really going through explosive growth," de Nysschen said of the entry-level sedan during an interview last week on the sidelines of the auto show here. "The same applies for the compact crossovers. We will need entrants there as well."
He said the small crossover would come first, in early 2017, after ceding a substantial head start to the Mercedes GLA, Audi Q3 and BMW X3 and X1. A sub-ATS car is to come later, probably in 2018.
Both vehicles are included in a $12 billion, multiyear capital-expansion plan for Cadillac that de Nysschen disclosed last week, spanning new vehicle platforms, powertrains and other technology.
The former Audi and Infiniti boss gave the impression that he's coming to terms with the depth of Cadillac's lineup shortcomings relative to Mercedes, BMW and Audi, the brands that he wants to challenge head to head.
Explaining why Cadillac is pushing an electric vehicle down its priority list, he said: "There are so many priorities, and there are obvious gaps in our product range in conventional cars that we should fill first, because those cars can immediately be profitable and help to finance our longer-term aspirations."
De Nysschen said ATS sales have suffered because its price has been undercut by the CLA and A3. The ATS started strongly when it was launched in 2012, but sales sank 22 percent last year, to 29,890 cars, amid the more intense competition. The CLA came close to that in its first full year on sale: 27,365. Audi sold 22,250 A3s in about 11 months.
The ATS starts at $34,210. The CLA's base price is $32,425. The A3's base is $30,795. Prices include shipping.
"Suddenly, you have access to a Mercedes-Benz at $30,000, whereas the ATS is starting several thousand dollars higher," de Nysschen said.
Unlike the front-wheel-drive layout of the CLA -- which is less expensive to develop and typically allows for more interior space -- Cadillac plans to build its future entry-level sedan on the same rwd platform that underpins the ATS, code-named Alpha.
"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."