Y ou might remember that the Peugeot 308 recently reached the final of the European Car of the Year competition, so it is an important model range for family car buyers to consider. The 308 range, like the 307 it replaces, has to sell against the likes of the new Ford Focus, the Vauxhall Astra and the VW Golf models.

Hatchback prices, with the addition of three-door versions, now start at £11,995 and rise up to £20,045 depending on the body style, trim level and engine option.

Expect to pay around £15,895 for the best-selling retail 1.6-litre 120bhp petrol SE five-door model and £16,495 for the likely top-selling fleet and business-user model, the 1.6-litre, 110bhp diesel Sport five-door.

The new 308 models put greater emphasis on aerodynamics and keeping the increase in overall weight to a minimum with the use of lightweight materials. These changes in part improve safety, performance and reduce fuel consumption and CO2 emissions.

The 308 has also achieved a Euro NCAP five-star rating for occupant safety, four-star child occupant safety and three-star pedestrian protection.

Standard equipment on all models includes: power steering, driver airbag, passenger airbag, side airbags, curtain airbags, remote control central locking with deadlocks, electric front windows, steering column adjustable for reach and rake, radio and single CD player, passenger and driver seat height adjustment, anti-lock braking, trip computer and electrically-operated door mirrors.

The new 308 five-door hatchback looks much bigger than the 307. There is the large smiling grille', available, with two types of finish depending on the specification chosen, the deeply sculptured bonnet with its pronounced and rather ugly nose, and the long front overhang which in hatchback form makes the car look front-end heavy. So the styling is good in parts.

But it is the interior that has the biggest and most improved changes. I think the quality is vastly improved over the 307.

The layout of the controls and instruments is much better and more logical and the fascia and door trims are superb. The curved fascia panel is positioned much further forward in the car. The centre of the fascia is now dished inwards giving both front occupants greater free space. The design also gives a lower forward site line, which improves visibility.

The rear seating space is also improved with adequate width for three adults. The backs of the front seats are neatly sculptured to improve knee room, but it is not plentiful. The rear headroom is also not great for a six-footer like me and the panoramic roof system, which adds even more light to the inside of the car, cuts down on headroom.

In addition to improved interior passenger space the extra overall length has given the 308 five-door hatchback more luggage room, 430-litres with the rear seats in position, 1,398-litres with the three rear seats folded.

The handling, ride comfort and roadholding are also improved. The wider front and rear tracks offer a flat and controlled ride with little bodyroll or fore-to-aft pitch. The suspension absorbs the potholes and bumps with relative ease, and the steering has a sharp turn-in and responsive attitude with good feedback.

The 308 feels a solid and well planted' car and this will appeal to all customers as it is definitely a move up in class and refinement.

I cannot understand why Peugeot have not fitted all 308s with the Electronic Stability Programme as standard. It makes sense in the interests of improved handling safety, for less experienced drivers, or when the car is fully loaded.

My test model was the 308 SE five-door with the petrol THP 150bhp engine. This model is priced at £16,895, but with the ever-present long list of extra cost options fitted, these included satellite navigation, alarm, 17-inch alloy wheels and front parking aid, the price was pushed up to a very hefty £19,895.

It will not be the best selling 308 model overall, but it is certainly the best performing petrol engine in the range if you like your family car to have some get up and go.

In many ways, for the driver who does not cover a huge mileage this is the engine of choice. However, with the twin-scroll turbocharger this petrol engine performs just like a turbodiesel unit as far as torque or grunt' is concerned. Maximum torque is 180lb ft from just 1,400rpm, which makes it the most responsive small petrol engine on the market. This performance is really user-friendly on the open road to overtake slower moving traffic in the minimum possible time, but also it remains very smooth to drive in heavy stop-start traffic, or in town. In fact it will allow the car to pull away from standstill in third gear - not to be recommended though.

The only downside is that it could do with a six-speed transmission to make it even more economical for motorway driving. The gearbox is not one of the 308's best features. It is not very precise or slick to use with a long gearlever throw. The partnership of this engine in the Mini with a six-speed transmission is much better and more refined.

In most ways the Peugeot 308 is a very fine and well-styled car, much better than the 307. But it has some serious competition and I am not sure that the excellent range of engines is enough to draw customers away from a new Focus or Golf.

The car has no advantage with price either as the standard equipment is not generous and the must-have options make the on-the-road price pretty steep, although Peugeot are starting 2008 with free specification upgrades for some 308 models.