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Baby Jaguar anyone?

There have been talks within the Jaguar team about the possibility of a BMW 1 Series-sized Jag.

After talking with leading British executives of the car company, it's still a 50-50 proposition.

It is confirmed that Jaguar design chief Ian Callum has produced a highly secret design for a small Jag.

However, Jaguar director of programs Mick Mohan believes there is no room in Jaguar for another model.

“Jaguar is a three-model brand; that's about all it can stand,” he said.

With the launch of the XF, Jaguar now has four models but Mohan believes the X-Type will be phased out about 2010. “There will be no small car. It's a very competitive segment,” he said.

“We can't compete in every part of the luxury sector. We need to pick our spots of where we are to compete.”

However, that is not necessarily the opinion of Jaguar chief financial officer David Smith, who flew into Melbourne this week for the funeral of UK Jaguar Land Rover chief Geoff Polites.

He believes the sale of Jaguar Land Rover to Indian company Tata could open a lot of options and believes a BMW 1 Series-sized Jag has some merit.

“The Jaguar design team has a lot of ideas,” he said. “I think that is one of a number of interesting options.”

He also thinks there is room for an F-Type — a modern interpretation of the iconic E Type sports car.

“But no decision has been made yet,” he said.

Here there is some agreement with Mohan declaring that Jaguar needs to “get some sporty character back into our products."

He suggested Jaguar could go the way of outgoing owner Ford by moving into smaller capacity turbo engines.

“We will work very closely still with Ford, so we will keep a close eye on what they will do.”

However, don't bet on the X-Type being phased out, either.

Smith says there has been no decision made yet.