Cadillac is reportedly working on a small rear-wheel drive sedan to compete in the compact luxury sedan segment

Cadillac is reportedly preparing a small rear-wheel drive sedan to compete the likes of the Mercedes-Benz CLA, the Audi A3 and the BMW 1-Series and 2-Series.

Speaking to Car and Driver, Cadillac marketing chief Uwe Ellinghaus confirmed such a car is in the works. He commented the brand doesn’t want to follow the German luxury brands by building front-wheel drive models and will rely on a RWD technology.

“Our future is rear-wheel drive and, of course, all-wheel drive where appropriate. My personal crusade is to spare us a hell of a lot of dilution of our emerging brand image by moving to front-wheel drive for potential smaller cars,” Ellinghaus said.

The new compact model will likely be based on the current GM Alpha platform that underpins the ATS and the CTS. The sub-ATS vehicle will be powered entirely by four-cylinder engines. The lineup will include a 2.0-liter turbo unit and smaller and less-powerful engines to lower the model's base price. The normally aspirated 2.5-liter four-cylinder that is Cadillac’s base engine now will likely be dropped.

The new luxury sedan probably won’t be introduced until 2016 with sales starting a year later.

Gallery: Cadillac preparing a sub-ATS luxury compact sedan – report