Jaguar needs a compact, entry level sedan to effectively compete in markets ranging from China though India and the United States. To succeed with a “baby Jag” sedan, Jaguar must apply the lessons learned from it’s last compact offering, the X-Type.

While not exactly a sales disaster, the X-Type produced underwhelming results for Jaguar in the U.S. market. Launched (to much fanfare) in the U.S. in 2001, the X-Type featured all-wheel drive at a price point meant to lure new buyers into Jaguar showrooms.

U.S sales failed to reach projected levels, peaking at just 21,542 units in 2004, before plunging to 10,941 in 2005. Despite this, Jaguar sold the X-Type in the U.S. market through the 2008 model year.

The X-Type lived on in other markets through the 2010 model year. Helped by diesel engine offerings and the choice of either all-wheel drive or front-wheel drive on select models, the Jaguar X-Type ultimately became the highest-volume Jaguar ever produced.

Jaguar now needs a replacement for the X-Type more than ever, and it’s no longer simply about drawing in new buyers. In the U.S., for example, Jaguar is concerned about achieving the EPA’s upcoming Corporate Average Fuel Economy targets, something it can’t do with just the current XF, XJ and XK models.

A “baby Jag” would need to be both fuel efficient and desirable enough to sell in quantities to offset Jaguars with less impressive fuel economy. If Autocar is correct, Jaguar’s designers and engineers are already hard at work on the new car.

It will reportedly be compact and potentially smaller than targeted rivals from Audi, BMW and Mercedes. Sources close to the car’s development cite an overall length of just over 177 inches, with power coming from three- and four-cylinder gas and diesel engines.

Breaking from Jaguar tradition, the new compact sedan is said to be front-wheel drive and may even share a platform with the Range Rover Evoque.

Unlike the X-Type, the new compact sedan won’t be priced to attract mainstream buyers. In fact, Jaguar describes the concept as a “modern interpretation of a compact, eco-friendly executive car,” with pricing to match.

It’s far too early to speculate on the car’s styling, but sources close to the baby Jag’s development claim it will be aerodynamic and will carry a “premium look.”

In any case, we’ve got some time to wait. The new compact offering from Jaguar isn’t expected to hit the market before 2014, most likely coming as a 2015 model.


Follow Motor Authority on Facebook, Twitter, and Google+.