Peugeot 408 vs BMW 118i

What's the difference?

The Peugeot 408 GT Hybrid delivers heaps of standard equipment and safety tech for what is now a much more competitive price. It’s also super fuel-efficient, which is right for these turbulent times, offers thoughtful practicality and the wagon-fastback-crossover-SUV look is striking. The price paid for miserly economy is a peaky small-engine powertrain and the ownership promise isn’t exactly class-leading. That said, it deserves consideration in its new, even more competitive under $60K mid-size SUV segment.

The 118i has restored my faith in entry-level models from premium brands. Could it do with more standard gear? Absolutely, especially at $50K, and given what you could get in a higher-grade variant from a mainstream manufacturer, like the Mazda3 or VW Golf.

But the 118i is a cut above the mainstream hatchbacks in terms of performance, driver engagement and how the car makes you feel. 

If value is the priority, look elsewhere. But if your budget stretches this far and you can live without some of the luxo features, there’s little to complain about with the 118i hatch.

Peugeot Design Director Matthias Hossann has been guiding the brand’s look and feel since 2020 and the result is a recognisable approach across the range with enough flexibility to give each model its own personality.

Recurring themes include the dramatic, fan-like grille with body-colour elements, narrow angled LED daytime running lights (DRLs) slicing through the outer edges of the nose and sinister tapered headlights set into the front corners.

The rear end maintains the visual drama with a stacked, angular treatment sectioning off the ‘Claw Effect’ LED tail-lights (the Peugeot brand mark is a Lion), chamfered mid-section and chunky bumper.

And among what increasingly feels like a mass of same-same newcomers the 408’s sloping turret and high, wide haunches give the car a distinctively sporty fastback look.

The interior is classy and clean although the almost uniformly grey colour palette is unrelenting.

The two-tier dash adds visual interest and a combination of sweeping curves and clean, straight lines around the cabin lift the tone. Nappa leather trim with the ribbed seat centre panels using perforated hide also looks classy.

But then we come to the ‘iCockpit’ instrument display and steering wheel combination. It’s based on the idea that reducing the size of the steering wheel and lowering its position while flattening its top and raising the location of the instrument binnacle is a better solution than the traditional look-through-the-steering wheel approach.

It doesn’t work for everyone and it doesn’t work for me. As noted in previous Peugeot reviews, after more than a decade in existence various members of the CarsGuide editorial staff continue to struggle with the arrangement, while others love it. 

For me, the wheel feels too low, yet the top of it obscures the lower part of the instrument panel. While it may work well for others I see it as the answer to a question no one was asking.

Since the first-generation model arrived on the scene in the early 2000s, the 1 Series has had a slightly awkward design, partly due to the rear-wheel drive underpinnings. But this latest third-gen model, that debuted in 2019, is by far the most sleek and stylish yet. 

This is helped by the slimline tail-lights, rising shoulder line and well-executed front-end design with the signature BMW quad headlights and wide 'kidney' grille. 

In Australia the 118i comes as standard with 'M suspension' that lowers the ride height by 10mm, which gives it even more of a hunkered down look. The 'Black Sapphire' paintwork of the test car also upped the sexiness of the little hatch.

The 1 Series, and its competitors from Benz and Audi, are all visually appealing in different ways, ensuring they will each appeal to different buyers. 

The interior design is unmistakably BMW, which hasn’t evolved significantly for about 15 years. Although new-generation models like the iX and the soon-to-launch X1 SUV prove that BMW can evolve.

BMW’s overall dash design and layout isn’t a million miles away from the edgy angular look of the new Audi A3 - and that’s no criticism.

The mixed synthetic leather and cloth trim on the seats has a cool blue cloth motif to break up the grey and add a small splash of colour to the cabin. Matching blue stitching on the dash and doors is a nice touch.

At close to 4.7m long, around 1.9m wide and a bit less than 1.5m tall with a 2790mm wheelbase, the 408 sits in the middle of the typical mid-size five-seater footprint.

Ample room in the front, although the lower section of the two-tier dash protrudes a fair way towards the driver and front passenger and the centre console is broad so it feels snug rather than airy.

Storage includes generous door bins with room for larger bottles, a lidded (and illuminated) bin between the seats that doubles as a centre armrest, two cupholders in the console with an oddments tray ahead of them and a decent glove box with an extra pocket built into the lid.

Switching to the rear, sitting behind the driver’s seat set for my 183cm position, there’s loads of leg- and headroom and enough width for three adults when required and more than enough for a trio of up to mid-teenage kids. Centre rear is less of a short-straw position, too, thanks to a relatively low and flat central tunnel.

The lack of a fold-down rear centre armrest is a miss mainly because it means there are no cupholders in the rear. But there are decent door bins with a space for smaller bottles, netted map pockets on the front seatbacks and a storage cubby at the back of the front centre console.

Speaking of which, individual air vents in the back of that console are a welcome addition.

 The boot is large for the class at 508 litres (VDA) with the rear seat upright and 1583 litres with the 60/40 split-folding backrest folded down. The power tailgate (with foot sensor and pedestrian detection) also makes life easier.

Other thoughtful touches include four load tie-down anchors, a netted pocket on the right-hand side, elasticised straps on the left-hand side, specific lighting and a pair of bag hooks.

Power and connectivity options include two USB-C sockets, a 12-volt outlet and a wireless phone charging pad in the front, another two USB-Cs in the back and a second 12V plug in the boot. So no problems with charging capacity for phones and other devices.

Maximum braked trailer towing capacity is a useful 1300kg (750kg unbraked) but we have to put a big black mark against provision of a repair/inflator kit rather than a physical spare. Not good enough for the Aussie market. 

Up front the 118i’s sports seats offer unbelievable levels of lateral support, and despite the bolsters being adjustable, it might be a little too snug for some. It’s expected for a pricey hot hatch but not the lower grade 1 Series. And given how much side support there is, it could do with a touch more under-thigh padding. The driver’s seat is power adjustable while the front passenger has to adjust their seat manually.

The typically chunky BMW M leather steering wheel looks and feels expensive and offers good grip. The minimal steering wheel controls are well labelled with text or clear icons. I appreciated the analogue air conditioning controls instead of them being buried in a multimedia screen menu.

The multimedia system menu is unfussy and while it’s not as tech heavy as some other systems, I don’t see that as a negative. It just means there are fewer functions you’re forced to remember. You can control the system via the 'iDrive' controller in the centre console or it can be used as a touchscreen. I like the way users are given both options. The 10.25-inch screen is nice and wide but quite narrow. Overall, BMW’s operating system is easy to use and functions well.

In terms of devices, the 118i has a wireless charging pad, as well as a USB-A and USB-C port, and a 12-volt charger up front.

It has a smallish central bin, but it’s fine for a number of smaller items. Tall bottles fit easily in the door storage bin and there’s a secondary slot for other items. The 118i comes with a decent sized glovebox, and two front cupholders with a nook for phones just behind it.

The 118i is more spacious than anticipated, especially in the second row. The back of the front seats are scalloped, allowing for a little extra knee room, but there is a good amount of legroom generally, and plenty of headroom, despite the lower roofline. 

The rear seats are on the flat side but still comfortable, and there are ISOFIX points on the two outboard seats.

Rear seat occupants have access to map pockets, two more USB-C ports, and storage for big bottles in the doors (just), but there are no rear air vents. The seats fold 60/40 and there’s no central armrest.

Open the hatch and you’ll find a reasonably sized boot that can swallow 380 litres, expanding to 1200L with the rear seats stowed. There is plenty of under-floor storage because there’s no spare tyre on account of the run-flats favoured by BMW. There are, however, a couple of tie-down anchors and shopping bag hooks.

The 118i kicks off the BMW 1 Series range from $49,900, before on-road costs. From there you can step up into the warmed over 128ti from $58,900, and the range is topped by the spicy all-wheel drive M135i xDrive in Pure ($67,900) or regular guise ($72,900).

The 118i’s circa-$50K price tag is a lot for an entry-level small hatchback, but it seems BMW has become better at including standard gear in its base variants. But it’s still not what you’d call generous.

Standard equipment in the 118i includes single-zone climate control, a head-up display, LED headlights and fog lights, an 'M aerodynamics' package, leather steering wheel, sports seats, a six-speaker audio system, auto-dimming rear-view mirror, rain-sensing wipers, 'M Sport' suspension, wireless smartphone charging, a 10.25-inch digital instrument cluster, and a 10.25-inch multimedia screen with satellite navigation, digital radio and Apple CarPlay. 

The only option fitted to the test car was premium paint ($1308) which brought the price-as-tested to $51,208, before on-road costs.

So there’s some good tech on the list, but there could be more premium features, you know, given it’s a premium brand, and all. Heated seats would be nice, for example.

Unsurprisingly, BMW offers a number of different options packs ranging in price from $1700 to more than $4000, depending on what you want.

Its two closest rivals are of course from the other big Germans - the Mercedes-Benz A180 (from $49,890) and Audi A3 35TFSI ($47,100) hatchbacks. The level of standard gear is relatively even across the three, although the Audi has the lead when it comes to safety (more on that below), hardly surprising given it's the newest of the three.

There’s also the question of value, especially when you compare with high-grade small hatchbacks from mainstream brands. Models like the Mazda3 X20 Astina ($43,190 BOC), or Honda Civic VTi-LX ($47,200 drive-away) could be good alternatives, or for similar money you could get into something sporty like a Hyundai i30 N Premium (from $48,000 BOC) or for a few grand more there’s the Volkswagen Golf GTI ($54,990 BOC).

The Peugeot 408 Hybrid is powered by a 1.2-litre, turbo-petrol, three-cylinder engine producing 100kW at 5500rpm and 230Nm at 1750rpm.

This compact, all-alloy, direct-injection unit works in concert with a single 15.6kW/51Nm 48-volt electric motor integrated into the six-speed dual-clutch auto transmission and energised by a 0.9kWh lithium-ion battery.

Drive goes to the front wheels only and Peugeot claims a 0-100kmh sprint time of 9.4 seconds.

The 118i is powered by a three-cylinder turbocharged petrol engine, offering up 103kW of power and 220Nm of torque. It’s the same unit found in the Mini Cooper, albeit uprated by 3kW for the BMW.

It is front-wheel drive and the engine is paired with a seven-speed dual-clutch automatic transmission.

BMW says the 118i can cover the 0-100km/h sprint in 8.5 seconds.

If you’re after a quicker 1 Series, then the 180kW i28ti or 225kW Mi35i xDrive could be a better pick.

The 408 Hybrid’s official fuel consumption figure for the combined (urban/extra-urban) cycle is 4.5L/100km, the 1.2L turbo triple emitting 102g/km of CO2 in the process.

And it’s important to point out those official (ADR 81/02) numbers for the 408’s consumption and emissions are better than any of the direct competitors we’ve called out in the ‘Price & Features’ section above. 

Over a week of mainly city and suburban running with some freeway sections thrown in, we recorded an on-test average of 6.0L/100km. Impressive for a mid-size crossover weighing in at a bit over 1.4 tonnes.

Brim the 52-litre tank with minimum 95 RON premium fuel (ethanol blends not recommended) and using our real-world figure you can expect a handy driving range in excess of 860km.

According to BMW, the 118i consumes 5.9 litres of fuel per 100 kilometres. During my week of mixed driving with the hatch, I recorded a much higher average figure of 10.8L/100km. This was exacerbated by the fact I did my main test drive shortly before returning the car. It was much more efficient around town.

It has a 50-litre fuel tank and does require premium 95 RON petrol. In terms of CO2, the 118i emits 135g/km.

Even with the assistance of an electric motor in the transmission and a turbo on the engine, a 1.2-litre, petrol three-cylinder powering a more than 1.4-tonne five-seat car is always going to be an interesting equation.

And in practice, although the small triple’s peak torque (230Nm) is available from just 1750rpm it lacks the smoothness of larger capacity mild- and full-hybrid combinations. Especially at slower speeds, the powertrain feels relatively edgy and agitated.

Outright acceleration is fine (claimed 0-100km/h acceleration is 9.4sec) with decent mid-range pulling power for confident overtaking or decisive lane changing (a 15.6kW/51Nm boost from the motor playing its part) and the dual-clutch auto is a more polished example of what can be a fractious device. 

But engineering and tuning for maximum fuel-efficiency has an impact on driveability. For example, we noticed the air-conditioning system’s output softened at standstill, which led to some mild window fogging in stop-start traffic on a particularly humid morning. Haven’t seen that for a while. 

The strut front, torsion beam rear suspension delivers a compliant ride and responsive handling in classic Peugeot fashion. The steering in particular points accurately and provides good road feel. 

We’ve covered the intricacies of the i-Cockpit instrument and steering wheel configuration in the Design section as its shortcomings (for me, anyway) are more ergonomic than dynamic.  

The car is relatively quiet, thanks in part to sound-dampening acoustic glass and the Michelin e.Primacy tyres (205/55) which also grip persistently if you decide to slice through your favourite set of corners. Push the engine harder and it’s revvy note and exhaust rasp will start to make their presence felt. 

Regenerative braking is helpful and the physical brakes (ventilated discs and the front and solid rotors at the rear) are nice and progressive.

The front seats are firmer than the Peugeot norm but remain comfy enough and they provide enough side support to keep you well located. 

Despite the swoopy fastback design, all-around vision is surprisingly good and an overall length under 4.7m, an acceptable 11.2m turning circle, a clear reversing camera and a 360-degree camera view make parking straightforward. 

To be honest I wasn’t particularly hopeful of an engaging driving experience with the 118i given I have been underwhelmed by the base Mercedes-Benz A-Class. But after a week with the 1 Series, I reckon it might well be the pick of the premium players in this segment.

The 118i is also a much more enjoyable car to drive than the entry-level version of the outgoing X1 SUV with which it shares a powertrain. If you don’t need the extra cargo space or the ride height of the X1, then please test drive the 118i just to see what you’d be missing if you opted for the X1.

BMW has always excelled when it comes to building punchy powertrains for driver’s cars, and that continues to be true, even for its smallest internal combustion unit.

The 103kW/220Nm turbocharged three-pot is smooth yet responsive, offering linear power and torque delivery and acceleration that will bring a smile to your face.

Obviously it’s not as quick as its sportier 1 Series siblings, but make no mistake, you can still have fun in a 118i.

There’s a little bit of lag when taking off and some hesitation from the seven-speed dual-clutch transmission during shifts, but neither are deal-breakers.

That obsession with driver engagement has paid off with the steering which is quick and direct.

The suspension is geared towards dynamism and as a result of that, and the sharp steering, you’ll be seeking out the nearest twisty section of road every time you get behind the wheel. It’s planted in corners with excellent road-holding characteristics.

Unfortunately that dynamic tune, and the low-profile tyres, means the ride is on the firmer side and a little jiggly around town, but it settles at speed. 

In terms of visibility, the 118i has huge B- and C-pillars, small rear side windows and a narrow rear windscreen, so you’ll be relying on the parking sensors and camera. The 11.4m turning circle feels large for a small car, too. 

The cabin is well insulated from some outside noise but coarse chip roads will make their presence felt.

The 1 Series range was awarded the maximum five-star rating from crash safety watchdog, ANCAP, in 2019.

The 118i comes with front and rear parking sensors, reversing camera, cruise control, low-speed auto emergency braking, forward collision warning, rear cross-traffic alert, lane departure warning, driver fatigue detection, and six airbags.

It is not fitted with a front centre airbag to help mitigate against injury between the driver and front passenger in a side collision. Only the Audi A3 has this out of the three Germans in this segment.

In this grade, the 1 Series is fitted with regular cruise control, rather than the adaptive system that moderates speed according to the speed of the vehicle ahead. It is a surprise to see the more old-school system in a BMW.

The lane keeping aid works well, smoothly centring the vehicle in the lane when required.

Peugeot covers the 408 with a five-year/unlimited kilometre warranty, which is perilously close to sub-par in 2026 with an increasing number of brands at seven, eight and up to 10 years conditional. The battery warranty at eight years/160,000km matches the market.

Roadside assistance is included for five years, service is recommended every 12 months/15,000km and pre-paid servicing is offered across three-, four- or five-year plans, with the latter at $2070.

That’s a not insubstantial average of $414 per workshop visit, which Peugeot says will save you $893 compared to pay-as-you-go over the five years.

For reference, a Toyota RAV Hybrid service for any of the first five years is $260, although pricing steps up after that period.

Peugeot has a well established network of 31 dealers mainly covering major cities and key rural areas, primarily on the east coast. Currently, no presence in Tassie or the Northern Territory, while Perth and Adelaide are the only representation in WA and SA. 

BMW continues to offer a three-year/unlimited kilometre warranty for its models, which is disappointingly a couple of years off most rivals these days.

The German giant also does things a little differently when it comes to servicing. Instead of service schedules, it has ‘condition-based servicing’, which is when the vehicle’s computer will inform you when the car needs a service. 

BMW’s Service Inclusive pre-paid plan runs for five years or 80,000km for the 1 Series, and costs $1700 up front when you buy the car. That averages out to about $340 per service, which isn’t bad for a premium marque.