Jaguar S-Type

Better late than never, Jaguar's entry into the diesel executive sector is admirable. The twin-turbo engine offers excellent performance and refinement and represents good value compared with main German rivals. The latest S-Type looks like an old classic, but it uses cutting-edge technology.

It's taken a while to realise, but it has finally dawned on Jaguar that diversity is the key to success. Since the decision was made to break with tradition, there has been no stopping the Coventry manufacturer.

First, there was the X-Type compact executive car, followed by front-wheel-drive, diesel power and even an estate. And although such developments may leave Jaguar purists feeling uncomfortable, the firm achieved its best-ever sales in 2003 and early signs suggest this year will be another record-breaker.

Here's the car Jaguar believes will boost those sales figures even further - the facelifted S-Type, complete with an all-new 2.7-litre diesel engine. The twin-turbo is critical not only for the manufacturer, but also for the rest of Ford's Premier Auto Group - and PSA Peugeot-Citroen. The firms developed the engine together, and it will power the next Land Rover Discovery, as well as the Peugeot 607 replacement.

With 206bhp on tap, it isn't lacking in power, while 435Nm of torque gives even better pulling power than Jag's 4.2-litre V8. Six-speed manual or auto transmissions will be offered when the car goes on sale here in June, while the price places the diesel between the 2.5 and 3.0-litre V6 petrol engines.

We drove the 2.7D Sport variant, which has body-coloured trim and firmer suspension than the SE. The retro style remains, but the nose is softer, the grille rounder and the old model's fluted sills have been straightened out. At the back, alterations have been made to the lights, rear trim strip and bootlid. Jaguar also claims the luggage capacity has increased, but it remains an S-Type weak point, with a shallow load bay and narrow opening.

You can't escape the fact that this is an oil-burner when you start it from cold, as the engine is fairly clattery from the outside. The soundproofing is excellent though, so the cabin remains incredibly quiet. On the road, the S-Type feels extremely responsive, if slightly hesitant off the mark - a trait less noticeable on the automatic model.

The mid-range pull is incredible and high-speed refinement is up there with class leaders such as the BMW 530d. If you spend much time on the motorway, the new diesel's relaxed cruising ability and incredible torque are preferable to a petrol model - and it returns 40mpg. The six-speed manual gearbox, however, is not so impressive. It feels sporting thanks to a precise shift and short throw, but the clutch is heavy and the car seems short-geared in the lower ratios. As with most Jaguar buyers, we would favour the automatic, as it is more suited to the S-Type's excellent ride and refinement.

The drawback is that the self-shifter bumps up the emissions, taking the model out of the Euro IV-compliant bracket and adding a three per cent loading to the tax level for company car users. The revised chassis does not have quite the edge of rivals such as the 530d, but the precise steering, supple chassis and Sport suspension provide rewarding handling that always feels assured. With the diesel likely to account for more than 40 per cent of S-Type sales, and aiming to double the model's market share in Europe, the oil-burning models have to be good - and this is the best S-Type yet.