For 2002, Jaguar has set its sights on a consumer that's younger and more mainstream that any it's ever targeted before. With the rollout of its all-new X-Type model line, the manufacturer drops prices, ups handling and throws in a manual tranny -- all, no doubt, in an effort to woo the entry-luxury demographic currently tossing pennies in the direction of Teutonic titans such as Audi and BMW.

X-Type buyers get a choice of two engines. There's a 2.5-liter DOHC V6, which generates 194 horsepower at 6,800 rpm, and 180 pound-feet of torque. There's also a 3.0-liter DOHC V6, which kicks out 231 hp at 6,800 rpm and 209 lb-ft of torque. We had the chance to drive the 3.0 and found it smooth and capable, with impressive power at both the top and low end of the torque band.

The X-Type expands Jaguar's range of cars in a few noteworthy directions. First of all, it's the first Jaguar vehicle to boast an all-wheel-drive system. Called Traction 4, this system is somewhat similar to Audi's quattro, with 40 percent of the power sent to the front wheels and the remaining 60 percent directed toward the rear. Traction 4's rear-biased torque gives the X-Type a sporty feel; in most situations, we found that the sedan handled like a muscular rear-driver, with none of the wallow found in some of Jaguar's larger sedans. The X-Type is also the only Jaguar currently available with a manual tranny (standard in the 2.5-liter model and available as a no-cost option in the 3.0-liter model). Finally, the X-Type adds a new dimension of affordability to the Jaguar lineup. With prices that start at $29,950 for the 2.5 and $35,950 for the 3.0, it's significantly less costly than the other models in Jaguar's stable.

Looks-wise, this new Jaguar is smooth and sleek, with rounded quad headlights, a Jaguar leaper hood ornament and a discreet chrome grille proclaiming its heritage. The X-Type doesn't have the singular glamour of some of its pricier siblings in the Jaguar family, though; from certain angles, it's disappointingly reminiscent of a Ford Taurus.

Inside, the cabin design is more bare-bones than Jaguar's ultra-swank norm, with a notable reduction in the wood-and-leather quotient. However, look beyond the spartan presentation and you'll see that the X-Type comes packed with a full array of standard luxury features: Power-adjustable Connolly leather seats, automatic climate control, one-touch open/close power windows and remote keyless entry are all part of the basic package.

Loads of options are available for those seeking to append a little something extra to their X-Type. The $2,000 Sport package offers add-ons like a stability control system, alternate suspension configurations and bigger wheels and tires. There's a $2,500 Premium package, which brings with it options like a power moonroof and an ultrasonic reverse park control system. A Weather package ($600 or $1,200, depending on other packages purchased) includes options like heated front seats and headlight washers. Additionally, numerous stand-alone options are available, including xenon headlights for $675 and a $1,500 Entertainment package that includes a six-disc CD changer, 10 speakers and a 180-watt Alpine system.

When it comes to entry-luxury vehicles, the cream of the crop has long been Teutonic, with BMW's 3 Series reigning as the class' current sales king. While the X-Type lacks the distinctive styling of some of its competitors, its performance and handling make it clear that this is a vehicle that's got what it takes to give the Germans a run for their money.