Hot Jaguar XE-R guns for BMW M3

Jaguar is working on a series of high-performance cars that will provide fresh head-on rivalry for BMW’s M division and Mercedes-AMG - and an extreme M3-rivalling version of the new XE is among the models being lined up.

Buoyed by one of the freshest product lines in the industry - with the XE being joined by the brand-new F-Pace crossover and the second-generation XF by the end of this year - the British manufacturer is aiming to roll out halo editions that will appeal to well-heeled customers in key markets.

Read our thoughts on a standard Jaguar XE as we give it a thorough going over

Jaguar also expects the new performance models to boost brand equity and legitimacy in the same way that the M3 and C63 have helped the 3 Series and C-Class.

The fastest XE at the car’s launch is the supercharged V6 S, which has 335bhp - the same output as the entry-level F-Type. This could also be joined by a diesel S using the 237bhp, 369lb ft V6 that’s already seen in the XF.

For the performance flagship, instead of using the F-Type S’s more powerful V6, which would still fall short of the M3’s power output, Jaguar is expected to slot in the V8 from the F-Type roadster to create the XE-R. That should have 488bhp, enough to slash the XE’s 0-62mph time down to well under 5.0sec.

Jaguar sources have confirmed that this V8 is actually easier to fit under the XE’s bonnet than the more upright Ford-sourced four-cylinder petrol motor and Jaguar Land Rover’s own Ingenium four-cylinder diesel.

The S’s adaptive dampers will be retuned, giving the XE-R a much more focused chassis set-up, and the eight-speed ZF automatic transmission will be reprofiled for crisper, more aggressive shifts in manual mode.

The XE-R will probably be priced to match the M3, starting at about £55,000.

With this powerplant, the XE-R will fulfil the role of taking on the M3 and the C63 while still allowing the potential for JLR’s Special Vehicle Operations to create its own, even more hardcore edition.

That could use the 542bhp V8 from the F-Type R Coupé, allowing the fastest XE to outgun both of its German rivals and Audi’s forthcoming next-generation RS4. This version of the small Jaguar saloon would get further aerodynamic tweaks and access to more exotic materials, including carbonfibre.

Jaguar officials remain publicly cautious on the prospects of high-performance models. One high-level source said: “We need to get the next year to 18 months over and the new products established. Then our sales volumes will have doubled and we’ll be a different company, with the scope for further investment.”

However, it’s still thought that faster, more exclusive versions of existing cars are likely to appear before different bodystyles based on the XE. A luxury-focused coupé — an indirect successor to the XK, in effect - has been sketched by design director Ian Callum’s team, but it is likely to have to wait at least until a facelift of the saloon appears in late 2017.