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Is a Jag still a Jag if it's made in the USA?

Rolls-Royce may have a more regal reputation. Rover may still be "the nation's car maker". And Land Rovers may be more distinctive. But a Jaguar is still Britain's favourite car.

There's something about Jags: the consistency and grace of the styling, their drawing room-like cabins, their unthreatening road behaviour, plus all the history and heritage earned from winning the Le Mans 24-hour races back in the event's heyday in the Fifties. (Hard to believe it now, but many Britons used to listen all night to the radio coverage of Le Mans to see how the Jags were getting on, just as they now tune in to the overnight cricket from Australia or the West Indies in the vain hope that Atherton's boys won't be getting thrashed.)

Despite their hefty price tags, Jags don't inspire the same envy as other similarly priced cars. BMWs and Porsches get scratched by vandals and blocked by jealous motorists in traffic confluences. But a Jag's OK: there's something dignified about it. It's old money versus new money. We Brits have always preferred the former and, somehow, we associate Jaguars similarly. BMWs and Porsches are more for flash self-made types and, as befits someone always in a hurry, they are usually driven accordingly. A Jaguar is for someone who has time.

Yet not that long ago, Jaguar didn't seem to have that much time left. Ford, its owner since 1989, was tiring of the same old excuses, and of the company's inability to deliver new products on time and within budget. The face-lifted 1991 XJS, the first car launched after the Ford takeover, was almost 10 years behind schedule. At that point, no Jag had ever been launched on time. It was a pitiable record.

Not that Ford would have wound up the company: you don't do that after you've just spent pounds 1.6bn. No: the worry was that unless Jag could deliver new cars on time and on budget, new Jaguars would largely be rebodied Fords, and that the Ford people would call the shots. The threat, I'm reliably told, was quite great. It was lifted only after Jaguar proved it could deliver, with the most recent XJ saloon, launched last October. On time and on budget. As a further novelty for a new Jaguar, it was also instantly reliable. After all the John Egan PR ballyhoo of the Eighties ("we're now making cars as well as BMW, and Mercedes isn't far ahead") Jaguar is at last getting it right.

But now it's at a new turning point. Having won Ford's trust, it is trying to act like a company worth pounds 1.6bn. It is on the verge of moving from being a little company building slightly eccentric luxury cars to one that competes head-to-head with the world's most successful specialist car maker, BMW. Ford expects. And Jaguar's chairman and chief executive, Nick Scheele, reckons it can do its duty.

First up in a massive expansion programme is the new BMW 5-series rival, project X200, due to go on sale in early 1999. Well-rounded and bearing styling cues from the old Inspector Morse Mk2 Jag, the X200 is to be built in a reworked Jaguar factory in Birmingham, using heavy EU grants. No EU money, no British factory: Ford was quite clear about that. The likelihood was that the car would have been built in the US, where labour rates are lower. Besides, it is Jaguar's biggest market.

After X200, the next new big-volume Jaguar will be a smaller car. It's likely to go on sale in about six years, and compete with BMW's best-selling 3-series. This car, almost certainly, will be made in America. By then, it's likely that other existing Jaguars will be assembled outside the UK, using parts supplied from home base. Foreign assembly operations, widely used by BMW and Mercedes, will help Jaguar's sales, especially in South-east Asian and South American markets, already the world's fastest growing.

But of course Jaguars are quintessentially English cars. That's one of their appeals. Mindful of the possible dangers of launching a non-English Jag, Ford recently commissioned research into how the big Jaguar markets would react. The results were surprising.

In Britain, some said they'd stop buying. In America, nobody cared as long as the styling and engineering philosophy didn't change. In Germany, it didn't matter - unless Jaguars were built in Germany, in which case they'd be more likely to buy. Only in Japan was there a categoric, emphatic, insistent "don't-you-dare". The wealthy Japanese like their Burberrys and Aquascutums and Barbours. They like their Jags just they way they are, thanks very much.

Despite Japanese objections, foreign-made Jags are on the way. They will help to make Jaguar a bigger and better car company. Indeed, such is the ever-changing world market, Jaguar, Rover and Land Rover all seem to have buoyant futures, under their various foreign owners. (Rolls-Royce, I'm not so sure about.) And Jaguar will probably stay as the nation's favourite.

Whether it will keep quite the same soft spot in our hearts though, I doubt. We British have never liked out-and-out winners quite as much as characterful have-a-goers. Ford, I suspect, does not have the same attitude.