JAGUAR’S sleek XF has come in for a major mid-life makeover three and a half years after it replaced the under-rated S-Type, which landed here as the first Jaguar designed completely under Ford ownership in 1999 – 35 years after the original S-Type set new benchmarks.

Unlike the model it succeeded, the XF wears thoroughly modern sheetmetal around a highly ergonomic and high-quality interior, and continues to be underpinned by a solid and refined chassis outfitted with competitive petrol and diesel engines and all the luxuries you’d expect at this level.

The 12MY adds to that formula an XJ-style front end treatment – led by new wave-shaped headlights punctuated by signature ‘J-Blade’ LED daytime running lights and high-tech Xenon technology – and a host of interior quality and equipment upgrades, including a hard-drive sat-nav and audio storage system, XJ switchgear and colour TFT touch-screen and instrument panels – now finally with a digital speedo function.

All of that gives the XF cabin an even more luxurious ambience and tangibly more tactile touch-points, plus a classier user interface that’s a match for anything you’ll find in established German rivals like the BMW 5 Series and Mercedes-Benz E-class.

Biggest news, however, is the introduction of the XF’s first four-cylinder engine, which makes the 2.2D the first sub-$80,000 XF and therefore puts a medium/large Jaguar saloon within reach of a wider audience than ever before.

Forget about the wheezy 2.5-litre petrol V6 that powered the cheapest ($86,000) S-Type more than a decade ago, however, because this 2.2-litre turbo-diesel engine offers more power and torque than its key rivals to deliver seamless, muscular acceleration from idle to 4500rpm and big dose of diesel torque in between.

It doesn’t have as broad a rev range as some German diesel fours but, matched as standard with a silky-smooth ZF eight-speed automatic transmission, the upgraded JLR oil-burner spins like a petrol engine to beyond 4000rpm, providing effortless highway acceleration and almost lag-free bursts of speed from any speed.

Make no mistake while the XF 2.2D isn’t quite as efficient or quick as the 520d, it delivers BMW-like refinement and enough mid-range muscle to make this entry-level Jaguar a seriously satisfying sports tourer.

Indeed, the 2.2D is rapid enough to make many question the extra expense of a V6 turbo-diesel – even if the addition of the same eight-speed auto brings similar efficiency gains to six-cylinder 12MY XF oil-burners.

Apart from the wide spread of gear ratios and the diesel four’s relatively small displacement, the secret to the 2.2D’s low fuel consumption – which at 5.4L/100km betters many of the smallest new cars available – is a fuel-saving idle-stop system that automatically shuts down the engine at standstill.

Fitted for the first time on a Jaguar, it works as intuitively as the similar systems seen now in many models, restarting the instant you release the brakes (in both Drive and reverse – but not in manual-shift mode) and offering a clever ‘easy off’ function that places the car into Park if the car is stopped and the driver’s seatbelt is released and/or driver’s door is opened.

Given most engine wear occurs at start-up, we’ve always lamented the effects of stop-start systems on engine longevity – particularly diesel engines – but Jaguar says the system underwent millions of miles of simulated engine durability testing and activates only within a range of parameters including engine and transmission temperatures.

Perhaps more convincingly, the XF 2.2D not only comes with a three-year/100,000km warranty, but incredibly long service intervals of 26,000km.

Despite the plethora of changes made by Jaguar for duty in the XF, the JLR diesel-four is not as smooth as a petrol engine, with some diesel clatter and low levels of engine vibration evident at low speeds. Once on the move, however, we’d defy anyone to pick it as a diesel, until they feel the wall of mid-range acceleration on tap.

As slick as the powertrain combination is, however, the 2.2D’s eight-speed auto doesn’t behave like similar transmissions in rival models – or even other Jaguars.

Instead of defaulting back to Drive mode after you’ve left the steering wheel paddle shifters alone for 10 or so seconds, the XF eight-speeder uses steering wheel angle, yaw rate and throttle position sensors to decide for itself when to revert to Drive.

As we discovered, it can take up to 10 minutes to do so, even on a straight road at highway speeds with a constant throttle – and even after coming to a stop, making for potentially embarrassing 4500rpm round-town manoeuvres.

Jaguar says the transmission is smarter than others because it can judge if drivers want to be in manual mode or not, but that presumes all drivers only use paddles for enthusiastic driving and not simply the odd bit of engine braking or early upshifting.

The company also points out that one can revert manually to Drive mode after using the paddles by holding the (right-side) upshifter for two seconds, but that’s not quite as convenient as other systems, is it?

Of course, this is hardly a deal-breaker, but the lack of cutting-edge technologies like lane departure warning, adjustable damping, head-up display and night vision could be for some, particularly given Jaguar positions itself as a technology-focussed car company.

For sure, the XF has some high-tech features, and the advanced new hard-drive sat-nav and audio system, which can store up to 10 CDs of music, Bluetooth audio streaming, crisp new TFT colour instrument panel – finally with a digital speed readout – and classy colour touch-screen is up there with the best of them.

The XF 2.2D makes few concessions for its $78,900 pricetag, too, except for the omission of sat-nav and dual exhaust outlets, so entry-level XF buyers get virtually the same look, feel, refinement and well-sorted ride/handling balance as other XF customers.

Our test car returned fuel consumption of 7.0L/100km after 350km of hard, satisfying driving through the border ranges between NSW and Queensland on the launch drive, proving the 2.2D lets you have your XF cake while paying less for it in both the showroom and at the pump.

The XF currently attracts about a quarter the number of Australians as its most direct German competitors, so the cheaper – but just as Jaguar-like – 2.2D is almost certain to increase that number, as well as reduce the British brand’s average customer age of 44 and its proportion of male buyers, which now stands at 60 per cent.

Jaguar doesn’t need or want to sell as many cars as BMW, Mercedes or Audi, but the more accessible XF 2.2D is a precursor to a host of other new broader-brush Jaguar models – including an XF wagon, mid-size X-Type replacement, compact roadster and possibly even an SUV.

So the sooner Jaguar stops claiming it will increase sales while maintaining its long-coveted exclusivity the better.