The 308 replaces the 307 and although it shares the essence of its platform and wheelbase, it has grown 75mm longer, 53mm wider and sits on a wider track.

The 308 is offered only as a five-door hatch, although a Touring wagon could well follow.

But then there is a choice of not just petrol and diesel engines, but two of each.

Entry level is a 1.6-litre petrol of 88kW power available in the base XS model at $25,990 and better dressed XSE (automatic only) at $30,390.

A turbocharged version of that (also seen in the Mini Cooper S) gives 110kW in manual or 103kW (auto) and is in XSE trim only, at $30,590 (manual) and $32,590 (auto).

Turbodiesel engines start with a 1.6-litre of 80kW power and 240Nm torque, only in the XS version and in manual, at $29,990 - which means it's a hefty $4000 more than the standard petrol engine. Bigger and stronger is the two-litre turbodiesel of 100kW power and 320Nm torque at 2000rpm. It's in the XS at $33,590 manual and $2000 more for the automatic. But in the top-of-the-range XTE HDi it is automatic only, at $37,990.

I drove the XSE turbo-petrol with five-speed manual and then the XTE diesel automatic. Each is a fine car with good comfort in the front seats. Cornering poise and grip make them deceptively quick point-to-point cars and the ABS brakes are strong performers.

The 308s are reasonably refined - even the diesel engine has good mechanical noise suppression inside the cabin. However, a not uncommon issue with imported European cars on their European tyres is road noise/tyre rumble marring the quiet drive, particularly with the lower-profile tyres on the XTE.

Happily, these are European cars with full-size spare wheels.

All 308s get stability control as standard, except the XS versions where it can be had for just $450. It might be the best 450 life-saving dollars you ever spend.

The Peugeot 308 has a distinct design but its wide B-pillars rob some over-the-shoulder visibility for the driver at an angled road junction.

The XTE comes with a panoramic glass roof to let in light on a cloudy day. In hot sunshine, press the button for the roof blind to close. The glass roof is a $1000 option on the XSE.

The rear seat is firm, which means supportive, but an adult-size person won't enjoy sitting in the middle where there is little leg room. The boot has lots of tie-down loops and “curry hooks” to hang shopping bags. And the parcel shelf has a clever lid that can open from either side. The rear arm rest includes cup holders.

The sloping, big windscreen has cross-over wipers. You'll be buying replacement blades by the metre, such is their length.

The glovebox has limited space. Trip computer and other information is comprehensive and well displayed.

The turbo-petrol engine has good, linear feed once 1400rpm is up. It is an engine that sprints the car along when called upon but it's remarkably easy to achieve excellent fuel economy. Helped by a rural drive, I got 6.3 litres/100km. It sits at 2700rpm at 110km/h in fifth gear.

The diesel automatic cruises at this speed at 2200rpm and, with a lot more suburban work, averaged 6.5 litres/100km.

Official figures are 7.1 litres/100km for the turbo-petrol and 6.8 litres/100km for the diesel, so it's hard to justify the $3000 difference in engine price.

I'm a strong fan of modern diesel engines and even given the XTE has a good sequential-shift six-speed automatic and more luxury equipment, the manual XSE with the willing but extremely fuel-economic turbocharged petrol engine and sweet-shifting manual transmission will do me - at $7400 less.