Jaguar has reportedly confirmed that a new entry-level sedan, smaller than the XF and the flagship XJ, is now in development.

The new model will give Jaguar the means to compete in the mid-size prestige segment, where its rivals will include the BMW 3 Series, the Audi A4 and the Mercedes-Benz C-Class.

According to British magazine Autocar, Jaguar's Global Brand Director Adrian Hallmark has confirmed plans for a mid-size offering, describing the medium prestige market as "four times the size" of the market for larger luxury vehicles.

While Hallmark remains tight-lipped on the specifics, company insiders have reportedly confirmed that the new model will be slightly smaller than the current XF, with the next-generation XF expected to grow in both size and luxury fittings.

The current XF is nearing a styling update, with recent spy photos revealing an XJ-like update to the headlights and rear end.