Jaguar XF 2.7D

SPECIFICATIONS:

Model: Jaguar XF 2.7D
Price: from £33,900, on sale now
Engine: 2,720cc, V6 cylinders, 24 valves, twin-turbo diesel, 207bhp at 4,000rpm, 435lb ft at 1,900rpm
Transmission: six-speed auto, rear-wheel drive
Performance: 143mph, 0-60 in 7.7 sec, 37.6mpg official average, CO2 199g/km

It seems the most important Jaguar for years has gone down well with the critics, if not all those who work for this newspaper. Maybe we have occasional flashes of doubt about the XF's styling as portrayed in photographs, but in the metal it looks modern, muscular and imposing.

It also pulls off the trick of looking like a credible Jaguar, because nearly everyone who sees it recognises it as one. The V8 versions I drove at the end of last year also felt as Jaguars should – quiet and smooth but not so insulated from everything that you lost touch with the notion of driving a car. And as for the interior, it's a brilliant convergence of Jaguar ideals and the modern world, and not a retro reference in sight.

The 4.2-litre V8s – of 298bhp or, with added supercharger, 416bhp – are the image formers of the range buttheir sales, in Europe at least, will be in the minority. This will be especially true for motorists in central London as the V8s' rated CO2 output is significantly greater than the 225g/km beyond which the congestion charge will soon rise from £8 to £25.

For this test, I have driven the two "entry level" XFs, powered by V6 engines. One is Jaguar's long-running petrol unit of 3.0 litres, which produces 238bhp. Unfortunately, this too busts 225g/km, so that brings us to the XF which will outsell all others by a big margin in Europe: the 2.7-litre V6 twin-turbo diesel, delivering 207bhp, a healthy 320lb ft of pulling ability, and generating 199g/km of the gas that plants crave even if we don't.

A 3.0-litre version of this engine is planned for the near future, which will add some extra energy, but if the current unit makes for a sufficiently lively, clean-living Jaguar then maybe the XF will be fine as it is. This is an engine, after all – the product of a joint venture between Ford and Peugeot-Citroën – that has had nothing but praise heaped upon it in its various forms, which include those found under the bonnets of the larger Jaguar XJ, the Citroën C5, the Peugeot 407 and, with just one turbocharger, various Land Rovers and Range Rovers.

A humbler engine doesn't mean a humbler XF, as even this 2.7D can be had in the two trim levels of Luxury and Premium Luxury. This is partly to ensure good residual values, because to have an Abject Poverty version in the range, which no one would want to buy second-hand, would drag values down overall and so push leasing costs up. Indeed, in an extraordinary feat of transference into the next space-time continuum, the two big trade guides to used-car prices have predicted residual values for the XF that are better than those for any of its German competitors.

Fine. So this XF 2.7D that will be worth 50 per cent of its original price when it is three years old and has covered 36,000 miles – what's it like? It sounds different from the V8s but its deep, smooth six-cylinder note is more that of a 1960s petrol engine than obviously of a diesel. You can feel a little tremor through the steering wheel when the engine is idling – which I am told will be tuned out of the cars by the time they reach the showroom – but otherwise the only real clue to the engine's method of functioning is its powerful pull from medium speeds and the way the power fades as 5,000rpm nears.

The XF 2.7D actually accelerates more briskly than the petrol V6, reaching 60mph in 7.7 seconds from standstill. And that's with the six-speed automatic transmission fitted to all XFs, operated by a rotary knob in the centre console which rises out of its wooden surroundings when you press the starter button, which itself pulsates in red as you open the door and step inside. It's all very biotechnical, this giving of apparent life to mechanical objects, but drive the XF at night and you'll also see a crisp, electronic edge to its interior design as the switches are outlined in a pale greeny-blue like the keys of a mobile phone.

But I was going to tell you about the gearbox, whose automatic mode works smoothly but which needs the encouragement of the paddle-shift manual mode to get the best from this engine on a curvy, hilly road. The transmission responds quickly and positively to the paddles' commands, and even this diesel engine gets a little blip-up of revs during a downshift, to smooth the transition between gears.

So the diesel XF is as refined, well-mannered and lively as a Jaguar should be, making it the most sensible and conscience-salving version in the range. It steers and handles with the same verve as other XFs, and shares their relaxed, fluid approach to road disturbances at speed and slight fidget over bumps at low speeds. That's the price for the poise and precision you enjoy the rest of the time, and it's a small one as the Jaguar still rides more smoothly than most rivals.

It would be good to try a mere Luxury model, running on 17in wheels – to compare with the Premium Luxury tested whose 18in wheels have less supple tyres. The Luxury XF lacks the grander one's stitched-leather dashboard and upper-door covering, but its soft vinyl substitute is still genuinely stitched.

The petrol V6 isn't as good as the diesel. You have to work it harder, creating more scope for sudden, intrusive gear changes, and it seems a little overwhelmed by its task. Better stick with the 2.7D, then – but what Jaguar could also do with is a four-cylinder diesel of 2.0 to 2.2 litres.

Sacrilegious? Not really: all the German rivals have them. Ford and Peugeot do have an excellent 2.2-litre unit of 170bhp, but it is designed to be moun-ted transversely for front-wheel drive so would need a redesign for the XF. An engine from a Ford Transit, then? Now that would be a marketing challenge.

THE RIVALS:
Audi A6 3.0 TDI Quattro: from £32,050
More power than the XF plus standard four-wheel drive, and this is a pleasing engine to drive behind. Beautifully made but not as heart-warming as Jaguar.

BMW 530d: from £34,655
That rare thing – a straight-six engine, and a smooth, powerful one too. Enjoyable handling mirrors Jaguar's, and Efficient-Dynamics with stop-start makes CO2 low at 170g/km.

Mercedes-Benz E280 CDI: from £33,097
Cheapest E280, in Classic trim. Lacks XF's luxury but is a solid, functional and satisfying car to drive and own. Starting to look and feel dated now.