Speaking to What Car? at the Geneva motor show, Hallmark said: 'We cannot give it a premium price unless we have premium substance, and we cannot undercut rivals because we haven't got the economies of scale.
'We'll differentiate through the design, the driving experience and the interior fit and finish,' he added. 'We've got to lead the segment in these areas.'
Initially, this successor to the X-type will be offered as a saloon only, but Hallmark hinted that more variants are likely to follow. 'I can't say today that we're definitely going to offer this bodystyle or that bodystyle,' he said, 'but I can say that there has to be activity every year to reinforce what we've already done and sustain the car through its whole life.'
Prior to the launch of its new 3 Series rival, Jaguar will launch the production version of its C-X16 sports car concept.
The name of the production version which is expected to be priced from around 55,000 will be announced at the New York motor show in April, and Jaguar sources have told What Car? that it will signal a new naming strategy for the brand.
Jaguar will also introduce a more comfort-orientated version of its flagship XJ saloon in the near future.
The current XJ is one of the most driver-focused models in the luxury saloon class, whereas this additional variant will be aimed at owners who prefer to be chauffeured. It will have a slightly more forgiving suspension set-up and be available with extra air-conditioning and two individual rear seats separated by a high-tech centre console.
In the longer term, the successor to the XK will be available with six-cylinder petrol engines (the current car comes with V8s only), but Jaguar hasn't decided whether it will offer a diesel; the V8 diesel from the Range Rover won't fit, and while the XF's 3.0-litre unit will, the company feels this doesn't have the 'powerhouse' character that the XK needs.
Jaguar might also add an SUV to its range, but this isn't a top priority for the company. Hallmark said: 'We can imagine competing in that market, and if we decide to do so, we have a toolkit to help us (thanks to sister firm Land Rover), but it's not in the plan at the moment.'