A fresh report out of the United Kingdom claims Jaguar is considering indirectly replacing its struggling XE and XF sedans with a “small” hatchback-style model.

According to Autocar, the Coventry-based firm is eyeing a more compact model capable of driving larger sales volumes.

The publication claims the newcomer would measure around 4 500 mm nose to tail (so, a little bigger than a 1 Series, A-Class hatch or A3 Sportback) and feature a “more elegant” design than its rivals from Germany.

“I’d love to do some smaller cars and it feels as though the time is right. Jaguar needs a global product that could appeal to younger buyers, and more females as well,” Jaguar design chief Julian Thomson told Autocar.

“Our values are ideal for owners who want more efficient cars but still like design quality, luxury and cars that are nice to drive.

“But it’s a tough sector. You need big numbers, which means big factories and a big organisation to sell them. But that’s definitely where I would like us to be,” he admitted.

Interestingly, the publication claims the RD-6 concept the debuted as long ago as 2003 could provide styling inspiration for the small newcomer and furthermore speculates Jaguar could turn to BMW for use of its UKL platform (the two companies already work together).

If Jaguar doesn’t end up building a hatchback-style model, Autocar suggested the firm might consider replacing both the XE and XF with a single, eco-friendly compact saloon.