4 May 2001: The new Jaguar X-TYPE will be a success - but will not knock the current kings of the sector off their thrones, according to UK-based automotive researchers AID Ltd and other analysts.

Sales are likely be held back by Jaguar's failure to foresee Europe's love affair with diesel power, with just two petrol engines - 2.5 and 3.0 litre V6s - for the moment.

BMW and Mercedes have a huge range of powerplants in the compact luxury sector from 4-cylinder 2-litre engines to massively powerful diesel and large petrols as well as a range of bodystyles.

BMW sold around 480,000 3-series cars globally in 2000. Jaguar expects to sell 40,000 X types in 2001, and up to 100,000 a year in the next couple of years. Automotive researcher J D Power-LMC expects X-Type sales to peak at between 80,000 and 85,000 next year.

In Europe alone last year BMW led the segment with sales of 284,000. The Mercedes C Class was next with 180,000, followed by the Audi A4 with 176,000. The Alfa Romeo 156 sold 98,000 while the Lexus IS200 sold 12,700, according to Automotive News Europe data.

The Jaguar X type may steal sales from the A4, the C class and the IS200, but experts believe the reputation as class leader in sporty road performance will still be held by BMW's 3 Series.

Peter Schmidt, managing director of AID Ltd, says the new X type is not as good as it could be, though considering they couldn't start with a clean sheet of paper, ‘they've done a fine job’ he allows

Cars competing in this sector ideally should be rear-wheel driven like the BMW, Mercedes and Lexus, he claimed. But because of the enormous expense of designing a car from scratch Jaguar decided to base the X type on an existing front-wheel drive Ford Mondeo, and dip into the huge Ford parts and resources bin.

"In order to make a selling point out of a weakness, Ford decided to make the X type four wheel drive, and build on the perception that it will give you the edge. But it won't. It just makes the car heavier and thirstier," Schmidt said.

John Lawson, auto analyst at Schroder Salomon Smith Barney, agrees that the X type was good, but could be better.

"Jaguar was trying on the one hand to use Ford's worldwide product resources and components systems, and keep the brand's uniqueness," he said. "I think probably the next generation will be more successful at achieving that than this one.”

Lawson felt that the car's exterior was attractive, but wasn't convinced by the interior. Traditionally a Jaguar interior is a haven of high class leather and wood.

According to AID's Schmidt, the launch timing was poor, with all the world's car markets showing signs of weakness.

Last month, Jaguar admitted its target of doubling overall sales to 200,000 cars a year would have to be delayed by at least a year to 2005 or 2006.

Jaguar also makes the S type, which competes against the BMW 5 series, the big XJ saloon, and the two-seater XK8. By 2005, Jaguar will also be producing the F type roadster, which will compete in the Porsche Boxster sector. CFC