The new model is expected to be the XT3, slotting below the current XT5.
Cadillac has reportedly confirmed plans to launch a new crossover model sometime late next year.
"The core part of our volume lineup is in the market that's contracting while we are unable, as good as XT5 and Escalade are, we are unable to fully exploit the updraft that's taking place in the other half of the market," Cadillac head Johan de Nysschen told The Detroit News in a recent interview.
To fill the gaps in the lineup, the company is expected to launch the smaller XT3 crossover. As the name implies, the XT3 would slot below the current XT5 in terms of size and price.
De Nysschen also reportedly hinted at a larger model that will eventually slot between the XT5 and the Escalade, while a second smaller crossover is on the roadmap for 2020 or later.
High-riding models will likely remain a top priority, but Cadillac is not forgetting about its cars. The company is developing a new entry-level compact sedan to take on the Mercedes-Benz CLA, allowing the brand to target a wider range of potential customers.
With plans to launch an average of two new products each year, Cadillac expects to have models available in 90 percent of the luxury segment by 2020 or 2021.
"That should put us in the strong position, whether the market continues to favor of crossovers, we have them," de Nysschen added. "If it rebounds back into sedans, we have them; we'll be in a far better balanced position."