Peugeot's best selling family hatch has undergone a complete redesign with a disarmingly broad grin. Dave Moore finds out what the new 308 is smiling about.

In France, the five-door hatch may be staple family automotive fare, but in a crowded market it has to be more than simple, basic transport.

It has to offer some panache, comfort and value for money for a company like Peugeot to sell on average more than half a million every year.

That's what it averaged during the life of the one-time European Car of the Year, Peugeot 307, and the replacement 308 model is designed to carry on where it left off.

When the 307 hit the market, a dozen competitors were in the same segment. The 308 now faces more than 20 cars, all aiming for the same slice of the market. One thing remains the same though: the VW Golf is the yardstick.

The 307 had a pleasant chassis and accommodation. However, having spent a couple of days in Peugeot's heartland Alsace region, punting the new 308 around sublimely difficult roads, I can report that its makers have not only sufficiently upped the ante on the car's integrity in order to keep the Golf honest, but they have also made it more capacious and even better in terms of ride and handling.

The range affords much the same selection of engines as the 307 did, but adds the 110kW 1.6-litre THP turbo engine used to great effect in slightly hotter form in the 207 GTI, and it will be part of the four-engine lineup in New Zealand when the 308 range arrives next February. Station Wagon and Coupe-Cabriolet versions of the 308 will follow later.

At first glance the 308 doesn't seem hugely changed from its predecessor, but look closer and you note a more prominent nose above the wide-mouthed grin, linking to the Le Mans prototypes, and a squared-off side vent. The nose-to-screen relationship is more sympathetically angled and cohesive, while around the rear wheel arch and C-pillar the 308 is more curvy.

Higher specification models gain a slightly more aggressive front bumper and a panel under the rear valance that resembles an aerodynamic diffuser.

Inside, the new 308 is vastly different to its predecessor, with a large sloping dash and console finished in soft-touch, mechanically textured vinyls that really do take the art to the Germans. This is the best-finished French interior I've come across. With five horizontally arranged chrome-rimmed vents to punctuate the new fascia, along with classy and lucid instruments and simple airconditioning and sound system controls, the 308's driving environment is a revelation.

Peugeot's designers have even come up with some new colours, including a strangely named "griege" – which looks as it sounds – various two-tone finishes and even a top-spec version of the car that uses hide over the complete dash area.

Though the car is about half a thumbwidth lower, and it's wheelbase is the same as the 307's, Peugeot has been able to liberate more room by taking advantage of wider front and rear tracks, using slimmer, more space-efficient front seats and inheriting some volume from the new dash treatment. This helps the 308 accommodate its human cargo in a better fashion than the old 307, which I found a tad cramped in the rear. Now, with the 308's front seat adjusted for my driving comfort, I can sit in the rear with clear space between my knees and the front seat backs.

Peugeot has managed to find 348 litres of luggage space in the hatch area. With the 60/40 split rear seat folded, that total load grows to a very handy 1398 litres. A neat touch is a handy hatch in the luggage shelf for valuables.

A so-called "Cielo" panoramic glass roof on higher-specification models conspires with the new sloping dash to provide the impression of even more space as well as visibility and a feeling of airiness, though there's some evidence that the car's air-conditioning struggles to maintain temperature when the blind is open.

The 308 is fitted with a minimum of six airbags across the board which will make its already comfy passengers feel even cosier, enabling the 308 to score a maximum five stars in NCAP for adult protection and four stars for children. And should someone step out in front of one, the 308's new 72mm longer nose affords three stars for pedestrians.

Chassis-wise, the 308 uses much of the 307's established mechanical and geometric set-up, with a pseudo MacPherson strut design up front and a torsion beam rear end. However a 12mm lower ride-height, a 10 per cent stiffer body, and tracks 30mm wider at the front track and 16mm wider at the rear give the car much better grip and makes it less affected by mid-corner ruts and bumps – specialities among road- builders in the Alsace region.

Bowling along, the 308 remained resolute and supremely composed, moving into inevitable understeer only very late in the cornering procedure, all the while imparting accurate messages through its hydro- mechanical steering. The whole experience returns the 307 to the magical fluidity I last enjoyed as long ago as the old 306 hatch, which combined grip, communication and comfort so completely in a chassis.

The THP engine whisks the 308 along with real gusto and with well sorted throttle and clutch actions, in the albeit slightly crowded footwell, and a notchy but accurate gearbox, it is easy to keep the 110kW unit on the boil.

Despite the car's gain of an average of 62kg over the 307, the THP engine is a also a relatively clean and economical performer (see spec panel) and certainly worthy of inclusion in the 308 range. However, the star, just as it was in the 307 is the 100kW 2-litre HDi whose 320 to 340Nm torque value is available from a lazy 2000rpm. This translates into extraordinary punch out of tight Alsatian bends and though the THP appears quicker on paper, I'd put my money on the 2.0 HDi.

Both will be automatics only for our market, and I expect the diesel to distance itself further from the turbo 1.6 as a result, as the HDI takes a six-speed unit and the THP a mere four-speeder. The entry-point car for New Zealand will be a naturally aspirated 1.6 which may only have 88kW on tap, but for a "cooking" engine it likes being asked to perform and like its siblings it's relaxed, refined and quiet at a 100kmh cruise.

The exact specification level for the New Zealand market is not finalised, but it's expected some models will get seven airbags and may even include a lane-departure system and directional bi-xenon headlamps.

We're likely to have ESP across the board in our 308s as well as high standard comfort levels, including airconditioning or climate control depending upon the model.

Peugeot mid-range hatches have always been engaging and capable cars and while the 307 was a pleasant enough drive, it didn't quite have the gamin and biddability of the sublimely-balanced old 306.

The new 308 does. It's fun without being nervous and twitchy. It's refined, and displays delightful ride quality and poise on iffy surfaces and fronts up with a level of build integrity that will give cause for a certain German hatchback maker to look over its shoulder.

If there's an area of disappointment with the 308, it's possibly its resemblance to the 307. This is a hugely capable car that really does take to the game of Golf and improves upon it.

- © Fairfax NZ News