Land Rover's announcement that it plans to move forward on a production version of the stylish LRX concept -- and badge it as a Range Rover -- following a $37 million development grant from the UK government is significant news. Even more significant, however, is the revelation from Land Rover North America sales and marketing chief Chris Marchand that "for the vehicle to be successful, there will need to be a five door [version]."

The beautifully detailed and artfully proportioned LRX, designed under the direction of former Lincoln design chief Gerry McGovern, is a sporty three door. McGovern insists the LRX, which is based on the Land Rover LR2 platform, could be turned into a production vehicle with relatively few cosmetic changes. The three door version would like be the entry-level model, while the five door would compete with Mercedes-Benz GLK, Audi Q5, and BMW X3.

Giving Range Rover a competitor in the booming small luxury SUV category is the key reason for the badge change. It also means the Land Rover LR2 will continue as the company's entry-level vehicle here in the United States.

"This will be a small, lightweight vehicle with a very efficient powertrain," says Marchand. "it will set us up for the future." Although the LRX concept appears very road biased, Marchand insists a production Range Rover version would be off-road capable. "We need to have the best capability in the segment," he says.

Given the production LRX will undoubtedly share its architecture and numerous powertrain components with the LR2, that means a dual-range transfer case is unlikely. But as Land Rover has proven with the LR2 is is possible to build a small "soft-roader" that is surprisingly capable in the rough stuff. Expect Hill Descent Control and a host of other electronic traction aids as standard equipment.

Land Rover is likely to confirm production of the baby Range Rover late this year, and Marchand says market launch here in the U.S. is two years away. That means Land Rover has already put a lot of work into the vehicle; the timing suggests much of the production design work has been completed, and only a final assessment of market conditions and corporate finances is needed before the final engineering and manufacturing phases are given the green light.

But will Range Rover be too late to the small luxury SUV party? Marchand doesn't think so. In fact, he's convinced there's a strong market for a small, upscale SUV, particularly here in the U.S., and there will be demand for a baby Range Rover. "This vehicle will be a segment changer," he says. "It will be a bold step for the company, and a bold step for the brand."