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Cadillac's new ATS may soon have a lot more company in the showroom - including a compact CUV.

Once the reigning U.S. luxury brand Cadillac is eager to reclaim lost ground and has put a target on the back of Lexus, which was itself the best-selling luxury brand until last year’s Japanese earthquake violently disrupted production.

The 2013 model-year will be a big one for the U.S. maker, as it rolls out both the new ATS compact luxury sedan and the more upscale XTS.  Cadillac is also working on plans to expand its line-up even further, officials now openly discussing plans to add a compact crossover – as first reported.

When asked about which brand was likely to windup to “donate” some market share as the deck is reshuffled in the luxury, segment, Cadillac’s marketing boss Don Butler didn’t hesitate – “Lexus,” he said, suggesting it certainly has a large pool of owners who could be persuaded to try something different.

Despite Cadillac’s clear ambitions, its rivals have steadily broadened and expanded the definition of luxury, leaving the General Motors brand a bit short of in some new and emerging product niches.

Even with the introduction of the 2013 Cadillac ATS in the highly competitive compact luxury segment and XTS in the full -size segment, Caddy will cover only 80% of the lux market — and rivals such as Audi, BMW and Mercedes-Benz are busy inventing new niches all the time.

But judging from the comments during a press breakfast this week – as well as discussions had with Cadillac management during the recent Pebble Beach Concours — the brand is seriously looking at getting into several critical segments.  That includes the premium-luxury market, where Caddy is likely to roll out not just one but several flagship models.

(For more on Caddy’s plans to turn the Ciel concept into production reality, Click Here.)

A Ciel-based 7-Series fighter might put a halo around the brand, Butler has said, but Cadillac insiders know there’s an even more important segment to fill as soon as possible.

“The compact luxury crossover segment has really taken off,” said Jim Vurpillart, Cadillac’s director of marketing. The Range Rover Evoque has had an enormous impact on luxury makers, he noted, and virtually every maker is now aiming at that niche.

The comments were echoed by Butler, who confirmed plans for a compact crossover, though he offered no details.

Cadillac’s confidence is buoyed by the recent success of its second-generation SRX.  The original version lagged ninth among large crossovers.  Since updating the CUV, however, it has jumped to second in the segment, behind only the Lexus RX.

Lexus is also considering its options for a smaller crossover, general manager Mark Templin confided in earlier this month.  But the Japanese maker is hesitant, he acknowledged, worrying that such a new offering could cannibalize sales of the bigger RX.

(Lexus looking at supercars, hybrids and compact CUVs. Click Here for that story.)

That hesitation could give Cadillac the momentum it needs as it fleshes out a showroom line-up that has largely been dependent upon a single model, the CTS, until recently.

Over the next year, Cadillac expects to bring out the new ELR, which is built around the plug-in hybrid powertrain from the Volt, as well as replacements for both the CTS sedan and Escalade, the latter to be built off General Motors’ new full-size truck platform.

There are signs the fast-expanding line-up is connecting with luxury consumers.  The ATS advertising campaign Cadillac aired during the London Olympics was an enormous success, Butler claimed.

Since the ATS hadn’t reached dealership yet, the timing wasn’t perfect. But the ads connected with a huge audience and raised consumer awareness of the new sedan. and others reported a sharp spike in research on the ATS and other Cadillac products following the Olympics campaign.

The question is whether that’s convinced some potential buyers to hold off until the new ATS reaches showrooms, Butler said.

Paul A. Eisenstein contributed to this report.

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