By 1967 Jaguar started to reduce its saloon range in readiness for the announcement of an entirely new car, starting with the demise of the 3.8 litre Mark 2. The other Mark 2s were replaced by the 240 and 340 models. Essentially the same cars, they were now fitted with slimline bumpers, Ambla (plastic) seating, and other trim changes, although the 340 benefited from a straight port cylinder head from the E-type sports car, enhancing performance somewhat. The Daimler 2.5 litre V8 then became the V8-250, also with slimline bumpers but retaining luxury appointments like leather seating.

The 340 was discontinued in 1968 and the 240 went out of production in 1969