WHEN Jaguar launched its new X-Type range in the summer with prices way below the expected £30,000 level, it sent a cold shiver down the spines of the other luxury car manufacturers.

Well, in three months' time watch out for the mass suicides, because the latest X-Type, a Jaguar cub, arrives with a price tag of under £20,000, making it cheaper than most Audis, BMWs, Mercs and Saabs, and threatening to the executive ranges of Ford, Rover, Vauxhall and Volkswagen.

The Jaguar marque is already a well-established choice at boardroom level, and the two-litre V6 X-Type will make a Jaguar available for the first time to many more mainstream company car drivers, especially the user-choosers who are able to select from a list of company car options.

Jaguar is pinning its faith on those company drivers who tend to select vehicles on image, desirability, exclusivity, ride, handling and performance and is confident the new two-litre X-Type will satisfy all these requirements, as well as being welcomed by those drivers who will choose to opt out of their company car schemes due to changes to benefit-in-kind taxation next April.

There are three models in the new two-litre X-Type range which goes on sale in March, using a brand-new 2099cc variant of the AJ-V6 engine. Jaguar has been able to cut costs of the new model, compared with the 2.5-litre and three-litre X-Types, by doing away with four-wheel drive in favour, not of the company's more familiar rear-wheel drive, but of its first-ever front-wheel drive platform.

The entry-level £19,995 model comes with a five-speed manual gearbox, and with a specification list that includes driver's seat electric height adjustment, 120 watt Alpine audio system, air conditioning with pollen filter, power, heated door mirrors, front fog lamps, leather reach-and-rake adjustable steering wheel, power assisted steering, electronic traction control, anti-lock braking with electronic brake distribution, an interior trim faced with bird's eye maple and a safety equipment package that includes front and side airbags, curtain airbags, and an approved security package.

For a couple of thousand more (actually £22,245), there is the Sport model which adds firmer suspension settings, a rear spoiler, and 17-inch instead of 16-inch wheels, but leaves out the exterior chrome work. Inside, it has cloth/leather sports front seats (leather on its own being one of the many extra-cost options) and various other sporty up-grades including grey-stained wood veneers, a leather gear lever knob for cars with manual transmission, or grey wood for the automatic selector.

Top of the range is the SE at £22,995 (still cheaper than many competitors' executive saloons). This specification includes full leather upholstery, cruise control, automatic climate control, eight-way electric adjustment for both front seats, wood trim on the doors, and a trip computer with message centre.

Among the optional features are dynamic stability control, rain-sensor wipers, xenon headlamps, automatic switch-on headlamps, reverse park warning, a touch-screen multimedia system, DVD satellite navigation and a fixed GSM phone.

Jaguar has called on an international range of suppliers, including Denso for the engine management system, ZF for the steering, Getrag for the manual transmission and Jatco for the automatic transmission, operated via the usual J-gate.

The power behind the new range of X-Types remains a 24-valve four-cam design engine, but with several lightweight additions as well as special technical changes to make sure that even the cub growls under acceleration.

Revving to 6800rpm, the new engine peaks at just short of 155bhp, and it hits 148lb/ft of torque at 4100rpm. Jaguar says that is enough for a manual transmission car to reach 60mph in 8.9 seconds. It takes the automatic 10.4-seconds.

Provisional fuel economy is 39.6mpg extra urban and 30.7mpg combined. These figures tend to be lower with the automatic transmission.

Built at Halewood on Merseyside, like the rest of the X-Types, the two-litre models will increase the number of variants available to eight.

They will come with a three-year/60,000-mile mechanical and electrical warranty which can be raised to five years and 100,000 miles for an additional payment, a three-year unlimited-mileage paint surface warranty and a six-year unlimited-mileage anti-corrosion warranty.