Jaguar prices XE above competition, I am sure the Germans are laughing at that.

The Jaguar XE’s likely best-selling model will be priced higher than its BMW rival in the brand's UK home market.

The XE 2.0-liter diesel sedan will start at 29,775 pounds (37,713 euros) in the UK, Jaguar said. The diesel will be targeted mainly at business fleet buyers.

The price is 1,000 pounds more than the BMW 320d Efficient Dynamics sedan, which has a similar power output at 163hp.

Despite its higher price, the diesel XE may attract buyers because of its lower CO2 emissions. The XE entry diesel with a manual gearbox has CO2 emissions of 99 grams per km, making it eligible for tax breaks that the UK government offers business and private drivers with cars below 100g/km. The BMW car has CO2 emissions of 109g/km.

The diesel XE also has lower CO2 emissions than the 104g/km of the Mercedes C-class C220 Bluetec SE. However the Mercedes is cheaper at 29,365 pounds. BMW and Mercedes will announce sub-100g/km diesel variants soon, according to media reports. The Audi A4, another big rival, is due for replacement soon.

The XE with a 200hp, 2.0-liter turbocharged gasoline engine and automatic transmission will start at 26,995 pounds. The range-topping 3.0-liter V-6 supercharged model will cost 44,870 pounds.

Both models will use Ford engines. The 2.0-liter gasoline will be replaced by a unit from Jaguar Land Rover’s new Ingenium engine range at a later date while Jaguar likely will continue to source the 3.0-liter V-6 from Ford.

Jaguar also will offer its Ingenium diesel in a higher tune of 180hp, as well as a higher powered four-cylinder gasoline engine making 240hp to give a total of five engine choices. By contrast, BMW offers six diesel and four gasoline choices, and a hybrid engine for the 3 series in the UK.

Jaguar has also said it will introduce a 2.0-liter twin-turbocharged diesel at a later date.

European sales of the XE will start early next year, followed by U.S. deliveries a year later.

The XE is Jaguar’s first contender in the premium midsize segment market since it axed the slow-selling X-Type in 2009.

The sedan is built on an all-new modular platform made with 75 percent aluminum that “will form the backbone of several future models,” according to Jaguar.

Jaguar wouldn’t say what those models will be, but the company has already revealed a concept of an SUV version that analysts expect to be built on the same architecture. A station wagon version is also likely in the near term.

JLR CEO Ralf Speth told journalists in September that the 168,000-unit annual capacity of the automaker's factory in Solihull, central England, which builds the XE, will not be reached until it is making three models from the new architecture.

IHS Automotive predicts that XE sales worldwide will peak at 63,700 in 2016, which means the sedan will almost double Jaguar's total global sales from the 76,668 figure it achieved in 2013.

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