The upcoming XS is rumored to look like a shorter XF Sedan, pictured here. Photo: Jaguar.  

In November, BMW (BAMXF 3.93%) reported that it sold 149,663 BMW brand vehicles worldwide. In contrast, Tata Motors' (TTM) Jaguar sold just 6,244 vehicles in November. Clearly, BMW is kicking Jaguar's proverbial tail. However, in 2014, Jaguar is expected to unleash an all-new vehicle, and it'll go head-to-head with BMW's 3 Series.

Will the XS boost sales?
It's no secret that Jaguar isn't nearly as popular as BMW or Daimler's (MBGA.F -1.05%) Mercedes-Benz, and one potential reason is price. The cheapest Jaguar, the XF, has a starting MSRP of $46,975. In contrast, BMW's wildly popular 3 Series has a starting MSRP of $32,750, and Mercedes' C-Class has a starting MSRP of $35,800. So to help drive sales, and compete in the entry-level luxury sports sedan segment, Jaguar is releasing its "baby Jag."

The name of Jaguar's new sports sedan hasn't been finalized, but it could be called the XS. More importantly, here's what we know. First, the base XS is expected to have a turbocharged 2.0-liter four-cylinder powertrain that produces 240 horsepower and 251 pound-feet of torque. Second, it could have an all-aluminum platform, which would make it lighter -- albeit more pricy -- and it could have an optional all-wheel drive. Further, if spy shots are accurate, the XS could look like a smaller XF.

The new BMW 3 Series Gran Turismo-M Sport Package. Photo: BMW.

Can Jaguar win customers?
Right now, there's no official world on the XS's price, but if it wants to be considered an entry-level sedan, it hopefully will stay around its competitors' prices. Moreover, the entry-level luxury sports sedan segment is incredibly lucrative for auto manufactures, which means the XS will face stiff competition not only from the 3 Series and C-Class, but also from Volkswagen's (VWAGY -1.11%) Audi A4, and Toyota Motor's (TM -3.23%) Lexus IS.

How it'll do against these luxury heavyweight titans is yet to be seen, but Jaguar's made considerable strides over the past few years, and an entry-level sedan could win sales -- plus, an entry-level sedan is exactly what it needs to grow its brand. Further, there are a number of reasons investors may want to consider Tata Motors.

Can Jaguar make you rich?
Jaguar isn't the only brand that Tata owns -- it also owns Land Rover. More importantly, as of November, year-to-date sales for Jaguar increased 47.8%, while Land Rover's YTD sales increased 14.2%. Even better? Jaguar's retail sales in China increased 166.6%, while its North America sales increased 57.6% YTD. Land Rover's retail sales in China increased 17.3%, while its North America sales increased 14.8% YTD. Considering China and North America are the two biggest markets for luxury auto sales, strong growth in both countries is great news.

What to watch
Both Jaguar and Land Rover have seen strong YTD sales, and the possibility of an entry-level sports sedan is great news for investors. However, there are concerns with Tata Motors, the most notable being that overall sales of Tata Motors' vehicles decreased 19% YTD. With that being said, if Jaguar's entry-level sedan is priced competitively, it could drive significant sales for Tata Motors. Plus, Jaguar and Land Rover have a growing presence in both America and China, and with Tata's commitment to continue growing these brands, there are number of reasons investors should give Tata a closer look.