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Jaguar's lower priced sedan targets key BMW demographic

British singer-songwriter Emeli Sandé is seen beside the

British singer-songwriter Emeli Sandé is seen beside the new Jaguar XE Sports Saloon on July 30, 2014, before the introduction of the new XE. Credit: AP

Jaguar is introducing a new entry-level sedan, challenging BMW's most popular model, as part of a push to triple sales by building vehicles more people can afford.

The XE Saloon, as the car style is known in the United Kingdom, will be Jaguar’s cheapest vehicle at about $44,000, when it goes on sale next year to rival the likes of the BMW 3-Series. The car is a critical test of Jaguar’s ability to compete for entry-level luxury buyers after halting production of the X-Type last decade because of disappointing sales.

The car, which marks the first model built on new aluminum underpinnings, “represents a bet-the-house gamble,” said Max Warburton, an analyst at Sanford C. Bernstein Ltd. in Singapore. “The XE launches into what is arguably the most competitive premium segment of all,” and rivals including the 3-Series, Audi A4 and Mercedes C-Class have “far greater scale advantages.”

The mid-size model is part of a record spending spree by Tata Motors Ltd.’s Jaguar Land Rover unit. The Whitley, England-based manufacturer is investing about $5.7 billion in the year through March to broaden its lineup amid stiffening competition. Fiat SpA’s Maserati is encroaching on Jaguar’s turf with the $66,900 Maserati Ghibli, and Volkswagen AG’s British ultraluxury brand Bentley will challenge Land Rover when it rolls out its first sport utility vehicle in 2016.

The XE features a lightweight aluminum frame to improve performance as the brand seeks to revive the sporty image of its heyday in the 1960s, when movie stars like Steve McQueen and Brigitte Bardot favored the E-Type sports car. The new Jaguar will be priced on par with the BMW 3-Series, which costs between $38,000 and  $73,600 in the United Kingdom.

With the XE, “they’re really making an exciting sports Saloon, as Jaguar used to,” Graham Searle, general manager of the Jaguar Enthusiasts’ Club, said in a phone interview from Bristol, England. Unlike the older clientele of its pricier models, the new sedan is “aimed at the iPad generation.”

Jaguar’s effort to bolster the XE’s appeal includes the ability to control doors, temperature and even start the engine via smartphone.

XE sales are forecast to peak at 63,700 cars in 2016, which approaches the brand’s 2013 global deliveries of 74,500, according to market-research company IHS Automotive. Flanked by other new Jaguars, sales are set to rise to about 230,000 cars by 2018. Still, that pales in comparison with the 2 million cars that Munich-based BMW expects to sell this year.

Jaguar is hoping its sporty heritage, which has been shored up by the 51,250-pound F-Type sports car, helps it woo buyers away from the German brands that dominate the luxury segment.

“There is something about Jaguar,” said Searle. “Jaguar had that cachet from the start in the Fifties, and then the E-type proliferated that image. It was sexy.”

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