The X-Type may not have been the success it was expected to be, but Jaguar is planning to again build a smaller model to compete in the volume end of the luxury car market.
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Britain’s famous sports-luxury car brand is undergoing a successful rejuvenation since it’s a change of ownership in 2008 from the US Ford Motor Company to India’s Tata Motors.

The Jaguar XF sedan and Jaguar XJ limo have both received widespread acclaim from the motoring media since they were launched in 2007 and 2010, respectively.

A Jaguar F-Type compact two-seat sports car, based on the CX16 concept and pictured below in prototype form, will debut at September’s 2012 Paris motor show, though the company is investigating other models that can provide sustainable growth into the future.

Jaguar design chief Ian Callum has ruled out a long-rumoured SUV - but not a crossover - for the brand, but in his exclusive interview with CarAdvice the Scot has admitted the company believes the lower end of the luxury-car scale is an area it may have to re-explore.

“We do understand quite clearly that we have to consider smaller cars for the future, we’d be mad not to,” says Callum. “And yes we’ve been doing studies to that end.

“That [BMW 3-Series] segment is highly competitive, and also highly pragmatic as well. It’s not an easy segment. So we have to carefully approach a segment like that if we approach it at all.

“It’s the volume segment. We can’t ignore it but we have to be careful if we even need to be there, and if we’re going to go into that segment in terms of cost and size of the car. Is the Jaguar brand relevant for that?”

The Jaguar X-Type was released in 2001 as part of a strategy to double the brand’s annual sales to closer to 200,000, though the compact sedan (a wagon followed) only exceeded 100,000 sales in its first full year on sale and was eventually axed in 2009.

The X-Type was hindered by quality issues, its known relationship with a humble Ford Mondeo with which it shared its platform, and the fact the model’s conservative, old-school styling alienated the younger executives that typify the customer base for more affordable luxury cars.

Jaguar says the X-Type still introduced new customers to the marque, and the model was still selling well in many markets, including Australia, before it was discontinued.

The XF and XJ, however, have already propelled Jaguar into highly respected contemporary car design, and Callum acknowledges a smaller brother to those models would continue in the same direction.

“If we were to go that way [of producing a smaller sports-luxury car], it’s not going to look anything like an X-Type,” he says. “If were to do a [smaller] sedan like an XF, we wouldn’t do a traditional three-box sedan any more than we’d to a traditional three-box XF.

“Our values remain true. We’re a sporty company and that would have to come over in the form or shape of the car.”

Jaguar insists that bigger profits rather than bigger volume remains the target, but that it does want to extend its reach to younger buyers.

“Yes, we want to look at growth in the company in a steady way,” says Callum. “And we know the only way to do that with any significance is with incremental product. We can’t do it with three products, or five products if you include derivatives – such as the XF Sportbrake [a wagon version of the XF].

“But that choice of product is key to the profitability of the brand. Volume doesn’t come into it; it’s part of it but it’s not the driving factor.

“You can do half the number of the cars and still make the same profit as building twice the number.

“We certainly want to become more attainable and more credible for people. I don’t believe downsizing has anything to do with affordability; it has a lot to do with what people want.

“But there are people out there buying expensive small cars.”

Surprisingly, Callum says he doesn’t consider the German luxury car companies direct rivals to Jaguar.

“I don’t always see ourselves as direct competition to BMW, Mercedes… I see us as an offset. The sportiness of our cars is all-important. We’re not a direct competitor to BMW or Mercedes, but clearly our customer base is of a similar nature.”

Jaguar is the fastest-growing luxury brand in Australia in 2012 so far, though its 290 sales to March are significantly lower than Audi (4339 sales), BMW (5415), Lexus (2110) and Mercedes-Benz (6174).