Jaguar hopes to transform itself from a niche manufacturer to a major competitor with the help of its latest model, the X-Type.
It believes the new £22,000 model will double its production and secure it a place in the compact saloon market.
And it predicts that the smaller and more affordable baby Jaguar will appeal to new and younger drivers.
Managing director Jonathan Browning said: "The X-Type connects Jaguar with a different type of customer.
"It challenges existing perceptions of Jaguar, broadening the appeal and the accessibility of the marque, and drives forward our ambitious growth strategy.
"We are selling more cars in more markets, and the X-Type is targeted with helping us double sales again."
The new model will be produced at Ford's former Halewood plant in Merseyside.
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