Jaguar is considering a rival to the BMW 1 Series and Audi A1 to follow up its forthcoming compact saloon.
Once the British manufacturer starts selling its compact saloon in 2015 – a rival to the BMW 3 Series and Mercedes C-Class – Jaguar could then launch an even smaller car in its range.
"It's not at the forefront of our thinking, but I certainly wouldn't dismiss it," explained global brand director Adrian Hallmark in an exclusive interview with AOL Cars.
"If we look at trends, CO2 and urbanisation in cities, small premium cars have got to be a part of the future landscape for Jaguar."
However, Hallmark said Jaguar has to make a success of its mid-sized saloon before it can launch a smaller car into the market.
"To leap two price brackets downwards wouldn't be sensible at the moment, but that doesn't mean I'm dismissing it. It's just not a short-term priority. We need to be successful in the C segment before we can go any lower."
Hallmark wants to take on BMW, Audi and Mercedes with the firm's new C-segment saloon, which he claims will be the "most efficient, most refined, most advanced and best designed" car in the class.
Hallmark also said Jaguar Land Rover has considered adding another brand to its portfolio – possibly something similar to BMW's 'i' range.
"We do talk about this," he told us. "Especially when we talk about EV strategies of our competitors and what we would do if we ever had to go full battery or electric – another brand may be the way to go. We haven't answered that question yet, but we do pose it."
Jaguar showcased the platform the new C segment saloon will be based on with this, the CX17 SUV concept. Find out more about it in this video.