Details for the high-riding compact remain under wraps for now, although industry sources say it is built on the same front-wheel-drive "Gamma" platform underpinning the all-new Barina light car.
Plans for a Holden-badged version of the Encore have been long rumoured, and it is expected to figure among Holden's "10 new models over 20 months".
There is plenty of room beneath the Captiva 5 for a new compact SUV, and with the segment sitting on 11,441 sales in Australia so far this year, it wouldn't be Holden's worst move.
It will, however, be hoping for a bigger impact than the first incarnation of the Cruze - a re-badged version of Suzuki's Ignis - which failed to ignite much consumer interest in Australia.
The Encore will make its international debut at next month's Detroit Auto Show. Watch this space for more details.