Based on the new 2.2-litre diesel engine, the new unit cuts output from 190Ps to 163PS and as a result the price has now fallen to below £29,950.
Jaguar has designed the new engine to sit at the bottom of the range and offer the lowest driving costs out of any Jaguar XF.
The new engine will return 52.3mpg on the combined cycle and cuts CO2 emissions to below 149g/km to deliver impressive results for a large, executive saloon.
This is bolstered by the inclusion of automatic stop-start technology and an eight-speed gearbox designed to be more efficient and save fuel wherever possible.
Despite this, Jaguar has quoted a 0-62mph time of 9.8 seconds for the XF, which is Jaguar’s best-selling model since its UK launch in 2008.
However, Jaguar has promised a typical Jaguar level of equipment with the entry-level Jaguar XF as expected from a brand taking on its premium German rivals.
Standard equipment includes a suedecloth interior with leather highlights and gadgets such as electronic climate control and a touch screen to navigate the sound system and information systems such as satellite navigation (which is available as an option).
The new engine joins three other engines in the Jaguar XF range including the more powerful 2.2-litre diesel, a 3.0-litre V6 diesel and a range-topping 5.0-litre V8 petrol engine available on the performance Jaguar XFR at a price of £65,350 on-the-road.
The latest Jaguar XF version is open for orders now with the first models arriving at Jaguar dealerships from March 2012.
The new 2012 Jaguar XF will make its debut in the Perrys Huddersfield Jaguar dealership at the same time.