“Will the new 3 Series kill the Jaguar XE?”

“Yes, I think so…”

The answer to the oddly pointed question came from BMW chairman Harald Krüger, but before it sparks an international incident, it is worth stressing that it was uttered in the spirit of friendly but determined rivalry, as opposed to anything overly aggressive.

A smile and a laugh later, Krüger was back on track, extolling the virtues of the new BMW 3 Series, unveiled at the Paris motor show, with only passing, oblique references to rivals. In short, with 15.5 million 3 Series sales to date, BMW was feeling pretty confident.

But what of the Jaguar XE, which was outsold by the 3 Series by a factor of about six in Europe last year? In many regards, the launches - and sales and profits - of the Jaguar F-Pace and then E-Pace have pushed the XE into the shade, and certainly customers have not been lining up at dealerships in the hoped-for volumes.

The disappointment is also something of a surprise, for the XE remains a good car - and a truly great one if you like driving. Yes, it is compromised, most notably in terms of rear space and some of the infotainment technology, but in this cut-throat category, being exceptional at something has usually been enough, be it the Alfa Romeo Giulia’s on-the-edge dynamics, the Mercedes C-Class’s cabin ambience or the Audi A4’s high-tech leanings.

It’s a point acknowledged by Jaguar’s relatively new UK MD, Rawdon Glover, although he is confident that he can add some renewed impetus to sales with some incentives, ahead of the XE’s facelift, which is anticipated next year. Although you wouldn’t expect him to admit it, Jaguar has launched a succession of new cars at rapid pace and maybe - just maybe - it has struggled to keep the plates spinning fast enough to generate the interest required.

In a market where SUV sales are growing and saloon sales are shrinking, however, Krüger’s comment did strike a chord. Is the XE - a bold push into smaller car territory after all - worth the investment?

While not addressing that point specifically, Ralf Speth, CEO of Jaguar Land Rover, was adamant that backing out of categories was a recipe only for disaster, and very clear that Jaguar’s saloon heritage needed defending. 

“We are a relatively small manufacturer, which means we have to win our customers. There is no big book of customers that we can refer back to. We have to persuade people to try our cars,” he said. “Once they do, they tend to love them, and we are not about to throw that away.”