Jaguar XFR

The Jaguar XFR is just about perfect. It's just a shame that fewer people can afford to buy luxury cars right now

Torque. It's mentioned in cars' specification sheets, and lots of it seems to be a passport to a rapidly effortless drive. But what exactly is it? It's what makes Jaguar's new XFR, the big-muscled version of the quite-new XF range, so beguiling.

I'm in Spain, imagining there's no recession. A hill approaches. Flip-flip on the left-hand gear paddle behind the steering wheel, down from sixth gear to fourth. The engine performs a perfect accelerator-blip to bring it up to speed for the lower gear. Jaguar's automatic transmissions have done that for a while, whether driven in auto or manual modes, but never as perfectly as this. Foot down, feel a surge of energy and a wave of motion discomfort as the XFR crosses the line between merely rapid and bombastic. As for the hill, it may just as well not be there.

The supercharged version of Jaguar's V8 has always been an exciting engine, but this all-new one is something else again. Its capacity is up from 4.2 litres to 5.0, power rises from 416bhp to 510, that torque – the twisting effort the engine can supply to the wheels, and which is the real generator of acceleration – has climbed from 413lb ft to 461, available all the way from 2,500 to 5,500rpm. No rival engine delivers so much musclepower over such a wide range.

Fine. But do we really need such a car? Possibly not. But at least, at 22.5mpg, the new engine is more efficient than those of any similar rival saloon. And if you're wondering why car-makers are even bothering to launch such a machine now, it's because the product plan was set out long before credit crunched. And the best way out of the mire, the car- makers think, is to launch good products to stimulate demand.

Besides which, the XF range has proved quite a success. Jaguar's figures show the XF has greatly improved the company's share of the luxury-car market, notwithstanding that this particular market has shrunk significantly and that Jaguar Land Rover has had to cut production and shed jobs. If demand recovers for powerful, sporting luxury cars, the XFR, at £59,900, is well placed to satisfy it.

Relative greenness is part of the appeal, with CO2 emissions at 292g/km merely high rather than embarrassing. The key, though, is the way the XFR feels potent without being threatening, the way it flatters its driver while looking after its passengers. And its interior is extraordinarily pleasing, simultaneously performance-focused and luxurious. No rival has a better-looking, more imaginative cabin.

The XFR looks good from the outside, too, with deeper front and rear valances, chrome mesh in the lower air intakes and subtle sill extensions with a gentle twist along their length. The wheels are 20in in diameter with "Jaguar Supercharged" lettering encircling the wheelnuts. The exhaust gases exit through four fat pipes, and the bonnet has a pair of vents to let the hot air out.

And so to the driving. Press the "start" button, see the red instrument needles light up and the rotary transmission-selecter knob rise from the centre tunnel, hear the V8 fire up. As soon as you move off you feel the innate tautness of the automatically adaptive suspension; Jaguar has decided to make its most sporting cars more sporting, and some might find the fidgeting over lumpy surfaces at low speeds annoying. It smooths out as pace rises, and you feel increasingly connected with a car which feels smaller and lighter than it is.

If you're not careful, you'll arrive at bends at indiscreet speeds and not even notice, such is the positive, confident way the XFR slices round the corner. And the engine? Aside from its thrust potential, it also has quite a vocal repertoire. Press a button with a chequered-flag symbol and not only will the suspension become firmer and the gear changes faster, but when given free rein the engine sings more lustily thanks to the bypassing of exhaust silencers. Acoustic tuning has tailored the V8 rumble and throb to please the ears, and the old engine's supercharger whine has been relentlessly hunted down and eliminated. Some people liked it, but Jaguar's engine chief, Malcolm Sandford, hated it because it suggested inefficiency and imperfection.

That sounds almost Germanic in approach, but the XFR is a very British car. Not only that, it shows the Germans how such a car should be done.