A few years ago, when Johnny Vaughan was funny, the fashion was to wear untucked Ralph Lauren shirts. The company had made them cheaper without skimping on quality and everybody was sporting that little horsey logo. It was designer wear for the rank and file. Us huddled masses lapped them up.

The Jaguar X-type 2.0-litre operates along similar lines. Put together a quality product with a badge middle management suburbia would stab their line manager for, give it a good price, light your pipe, sit back and admire your work. A Jaguar for the common man (and woman) - this will sell like hot cakes.

There have had to be compromises as a consequence. The entry-level 2.0-litre is the first Jaguar ever to be pulled along by the front wheels, but despite some gnashing of teeth by leaping cat traditionalists, it doesn't matter.

What matters is that it is a fine car with a fine badge at a fine price. I would be interested to know how many veterans of the Vectra/Mondeo wars start approaching fleet managers to see if they could add some cash to their allowance to move up to the Jag.

A fair few, I'll bet - because Jaguar has dangled the X-type tantalisingly close to a large group of company car drivers with its £19,995 entry-level OTR price tag.

Drivers will have to pay their dues though, as the base model doesn't get electric windows in the back or any sort of CD player as standard, but apart from that it does not do too badly.

It gets electronic traction control, air conditioning, six airbags, leather reach and rake adjustable steering wheel, a big slab of 'birds eye maple wood' across the dash and that roaring big cat in the centre of the steering wheel.

For a driver used to looking at blue ovals, griffins or lions, this will be a life-affirming moment.

Dermot Harkin, Jaguar director of UK operations, expects 40% of 2.0-litre X-type owners to come up from the 406/Mondeo/Vectra type cars, while 50% will come over from other premium manufacturers, such as BMW and Mercedes-Benz.

The Germans. They get everywhere. Virtually any road test is incomplete without reference, and often deference, to the mighty BMW and Mercedes-Benz. And Jaguar is pitching this X-type in particular against one of the mightiest products in motoring history, the BMW 3-series.

While Harkin admits the firm is not aiming for the same numbers as BMW, it is its chief rival in terms of quality, refinement, character and perception. In particular the 2.0-litre 318i, which performs very similarly in speed, fuel economy, residuals and that slightly blurry category called image.

The 2.0-litre Jag gets a 2,099cc V6, which is based on the same unit as the 2.5 V6 in the car a step up the range. While Jaguar could have made a four cylinder that emitted less CO2 and was therefore more tax- friendly, it would have committed the cardinal sin of being too similar to its cousin, the Ford Mondeo, and one just would not want to be like that side of the family, would one?

So CO2 levels are nowhere near class-leading for the Jag, although at 219g/km for the manual they do at least fall into the 25% category for the first year of the new system, which means middle mileage drivers would be tax neutral. It does rise to 29% by 2004/05 though.

With a P11D price of £19,265, the X-type is up against likes of the 318i at £19,320 and Mondeo 2.0i Ghia X at £19,265, although the Ford naturally outstrips the others on equipment by miles.

The BMW 318i is considerably lower at 190g/km, while Mondeo Ghia X registers 192g/km, putting both in the 20% tax band. A 40% taxpayer choosing the Jag would have to pay £1,932 a year, with the 318i costing £1,546 and the Mondeo £1,541. That equates to about £30 a month more for a 40% payer, which will hardly mean selling the children into slavery to pay for the car, and as mentioned before, the opportunity to own a Jaguar for the first time is going to be the over-riding factor for a lot of people. Looking at the rest of the technical sheet, the Jaguar stacks up well against the competition. It does 30.7 mpg on the combined cycle, 0-60mph in 8.9 seconds and according to CAP has some really stubborn residuals.

Our Leeds-based colleagues reckon the X-type will retain 46% of its price new, or £9,200, after three-years/ 60,000-miles. That is better than the 318i (44%) and out of sight of the Mondeo (29%).

There are two more expensive models available with the 2.0-litre. The £22,995 Sport gets uprated suspension, de-chromed exterior, spoiler and cloth leather sets, while the SE (£22,245) has full leather interior, climate control, trip computer and electrically adjustable seats. Still no standard CD player though, which is a bit stingy. Behind the wheel

The 2.0-litre V6 engine is a very tidy, tight-sounding motor with no hint of harshness. It is most powerful at 157bhp, high up at 6,800, so to get the most performance out of the Jaguar, the accelerator needs a good kick, which it doesn't seem to mind.

It isn't very quick, but has enough power to shift it along at a decent pace. Overtaking requires a drop of a gear or two though, to ensure the engine leaps up to very high revs and delivers all it has.

Jaguar likes to use the word agile for the X-type's handling, and it is, but not as much as the more expensive 4x4 versions of the X-type. Being front-wheel drive and with natural understeer if overcooked, the firm believes the majority of drivers will be safer as well, especially if they are moving up a class and not used to the back-end joys of rear-wheel drive cars.

The manual gearbox could do with being tighter though. Fifth is a bit of a stretch, and with a very light springy clutch, gearchanges at speed are not easy to smooth out, particularly on downshifts.

The steering is rather light as well, although the Sport model has a different suspension set-up with 17-inch wheels and feels much more involving for it. Hard chargers will like this model.

But they are a small minority of potential customers. What is really important is how it rides and how they feel behind the wheel, and there the X-type is excellent. You could cruise happily for hours and many miles in this car, relaxing in supportive seats. The excellently adjustable driving position and a plush environment with the trademark horseshoe centre console and long slab of wood feels properly Jaguar-esque despite being put together more cheaply than on an S-type or XJ.

Jaguars are all about covering distance at speed and without fuss. The 2.0-litre manages this pretty well despite being the budget end of the marque. So is the X-type just a Mondeo in a posh suit? I would say no, because the Ford is a better drivers' car, but what it does give is enough of the Jag magic to make it a serious contender for the cheaper compact executive cars.

I spoke to my uncle on the phone last night. He said he was getting a new company car, and when I told him there was now a Jaguar for under 20 grand his eyes lit up. 'A Jag! I reckon my budget could stretch to that,' he said.

I think a lot of company drivers' eyes will be lighting up because of this car.