Though outwardly similar to its X300 predecessor, the V8-powered X308 in fact required far more changes under the skin than had been needed to turn the XJ40 into the X300. The updates comprised a new engine, gearbox, front suspension and interior plus an entirely new electrical system that gave each car its own computer network.

The big news of course was the replacement of both six and 12 cylinder engines by a new all-alloy, quad cam 32 valve V8 power plant available in 3.2, 4.0 and 4.0 supercharged forms; with a special Nickel Silicone coating instead of conventional steel cylinder liners it was the lightest engine in its class, and in supercharged form bettered even the 6.0 litre V12 by more than 50 horsepower and 30 Nm of torque. Unfortunately, the high levels of sulphur in the petrol of the time, combined with a tendency not to warm up fully on short journeys, meant that this hi-tech coating was in some cases eroded over time, with a subsequent loss of compression, a problem also shared by BMW and Porsche. Jaguar eventually reverted to steel liners in August 2000, having replaced a huge number of engines under warranty. The push to further save weight by fitting only single row timing chains with plastic tensioners also triggered a number of failures and was really only rectified properly when the 4.2 engine arrived in 2003. The shame of it all is that the basic V8 design was actually very good, so with steel liners and 4.2 tensioners there is no reason why these engines should not outlast the car. There being no manual option, two different automatic transmissions were fitted, a five speed ZF with naturally aspirated engines and a more robust Mercedes five speed for the supercharged cars, which now included a luxurious LWB Daimler Super V8 to take over from the now defunct Daimler Double Six as flagship of the range.

Following a tendency in the X300 to tramline, especially when fitted with the large wheel/tyre combinations that were rapidly becoming the norm on high performance vehicles, the XJ8 front suspension was comprehensively redesigned to move the axle line back in relation to the wishbone mountings for greater stability, the wheel bearing layout was also radically changed, the traditional stub axle abandoned in favour of a cartridge bearing into which the hub was mounted, the ABS trigger ring also acting as the securing nut.

While the rear suspension layout remained basically unchanged, the differential design was modified to position the pinion centrally for better tail shaft alignment and with a new substantially improved traction control system the company felt no need to offer a limited slip option. Other electronic advances included stability control, which compares the direction the car is actually travelling with where the front wheels are pointing and can intervene with throttle reduction and the braking of individual wheels to recover control should a skid develop. Supercharged cars also had the option of active suspension; a computer monitors the way in which the car is driven and stiffens the dampers should the driver start to press on. This largely eliminated the ride/handling compromise that had dogged chassis designers for years.

The standard braking system was developed from that of the X300 but with larger brakes again up front on some supercharged cars; there was also an optional high performance brake package using Brembo discs and four piston calipers, this in turn required larger wheels with 18 and 19 inch split rim BBS alloys, all if this being listed in the new R Performance upgrade catalogue.  

Changes to the exterior were considerable, but actually quite hard to spot unless compared directly with its predecessor. There was more curvature to the bumpers, and the stainless steel blade no longer ran the full width of the car, they now extended in from each corner, terminating at the grille and bootlid. The grille itself was slimmer and curved along the lower edge while the headlights switched to clear polycarbonate lenses. The tail lights remained the same shape and size but were now ‘jewel effect’.

Inside the car, the dashboard featured three deep circular recesses in a slab of timber stretching the width of the car, housing the speedometer, tachometer and ancillary gauges respectively, replaced the conventional instrument binnacle. There was no oil pressure or battery gauge, but a new digital display beneath the speedometer could display a wide variety of warning messages. The new stereo panel also housed a keypad for the optional car-phone, basic functions for which could also be accessed, along with the cruise control, via steering wheel controls

Other changes to the interior included redesigned seats, new door trims with curved wood panelling, and a new, oval gear selector surround made initial from rather cheap looking plastic but later changed to leather as had been the case with the XJ40 and X300.

As with the X300, there were long wheelbase variants for each model, providing a good deal more rear legroom at the expense of a slightly ungainly side profile where the rear doors were noticeably longer than the fronts and higher roofline rose rather oddly above the gutter moulds.

The XJ8 changed very little in its five year production run, most upgrades aimed at increasing the level of standard equipment rather than adding anything new; one important revision however concerned the engine, which gained a new management system with electronic throttle control, two cam sensors (previously one) and oxygen sensors at both ends of each catalyst (previously only at the inlet), along with a change in designation from AJ26 to AJ27, the switch to this new engine was staggered, naturally aspirated cars receiving it for the 1999 model year, supercharged cars waiting until the 2000 model year.