Jaguar will launch a face-lifted version of the S-type in March with a new 2.5-litre engine and improved 3.0-litre engine that sharply reduce CO2 emissions, boosting its appeal to fleets.

The changes will provide the first S-type models to be taxed at below the maximum 35% tax band under the new CO2-based company car tax system.

The new 2.5-litre, V6 150bhp entry-level model will cost £24,950 on-the-road and emits 229g/km of CO2 in five-speed manual form, equivalent to a 27% tax liability.

Jaguar is also offering a first-in-class six-speed automatic gearbox across the range, as standard on SE models and as an option throughout the range.

The 3.0-litre engines in the range have also been cleaned-up, with the V6 Sport (£29,950) producing 249g/km, equivalent to a 31per cent tax charge.

In the current S-type range, the lowest CO2 emission is 270g/km, which qualifies for the maximum 35% tax charge.

At the top of the range, Jaguar is introducing a 4.2-litre 300bhp V8 and a 400bhp supercharged version, the R, the most powerful Jaguar saloon ever produced. It accelerates from 0-62mph in 5.3 seconds.

Other innovations will include an electronic parking brake on all automatic versions, which is engaged by pressing a dashboard switch, and optional electrically adjustable pedals. (January 3, 2002)