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Jaguar had its work cut out for it. The XE compact sedan must compete with a new-generation BMW 3 Series that seeks to regain more of its mojo, a strong Mercedes C-Class, the ever-improving Audi A4, and other contenders in a crowded and diverse field that range from the Alfa Romeo Giulia to the Volvo S60.
The XE launched with great promise in 2015, but it had a lot of hard plastic packed into an otherwise beautiful shape. It’s hardly a sales contender, selling about 4,700 in the U.S. last...