We like
Stylish and spacious cabin, agile dynamics, ride quality, top-notch media interface, perky engine

Room for improvement
Long-throw five-speed manual gearbox, interior storage, suspension noise, lack of low-end torque

Price and equipment

Entry to the 208 range starts at $18,490 plus on-road costs for the three-cylinder Active, but here we’ve tested the next step up the food chain – the $21,990 Allure.

The Allure is aimed squarely at ‘premium’ mainstream light cars like the Volkswagen Polo 1.2 TSI (from $18,990) and Ford Fiesta Zetec ($20,490), and comes well-specified.

Standard features include cruise control, rear parking sensors, one-touch power windows, electric folding doors mirrors, a seven-inch touch-screen audio system with Bluetooth and USB, climate control, a cooled glovebox, multi-function trip computer, LED daytime running lights, automatic headlights and wipers and 16-inch alloy wheels.

Interior

Arguably the highlight of the 208 is its chic and well-presented interior, which to our eyes may just be best-in-class.

Not content with just being well-specified, Peugeot has given its city car contender an array of upmarket silver trim, tasteful splashes of colour and several welcome ergonomic advancements.

For instance, the steering wheel is the smallest thing this side of a go-kart (and almost as sporty in feel), and sits fully below the instrument binnacle. Rather than peeking at the dials through the wheel, the driver looks over the top of the rim.

Awkward at first, we swiftly adjusted and found it to be a welcome innovation. The binnacle itself is clear, crisp and logical, and while the analogue speedo is tough to read, the digital meter makes up for it.

The central touch-screen is excellent for the class – in terms of size, ease-of-use and clarity – and the media connectivity is swift and easy. Peugeot has deleted the option of a CD player to save space and weight while appealing to its tech-savvy target market – and fair enough, we reckon.

For such a small car – it is shorter and narrower than its 207 predecessor – the 208 has decent cabin space, with rear headroom and legroom passable for a pair of people up to 185cm tall.

The sporty front seats (with tasteful blue highlights) are comfortable and supportive, and we had no trouble getting a suitable driving position. Cargo space is an excellent 311 litres (and there’s a full-size spare wheel under the floor – massive bonus point), and the back seats fold almost flat.

Less impressive is the lack of storage space, with a tiny glovebox, useless central cubby located in the folding armrest and teensy cup-holders. Most contact points are finished in lovely soft and squishy plastic, although harder surfaces adorn the top of the instrument binnacle and doors.

Engine and transmission

Power comes from a Euro 5-compliant 1.6-litre naturally aspirated petrol engine producing 88kW of power at 6000rpm and 160Nm of torque at 4250rpm.

The outputs on paper are certainly class-competitive, but in the real world it lacks the low-down punch of the less powerful but torquier 1.2 turbo used in the Polo.

The 208 requires a real rev to get the best out of it, at which point it feels willing and perky, but once the revs climb north of 4000rpm (right at the peak of the torque band) the engine refinement heads south.

The five-speed manual gearbox fitted to our test car could use an extra ratio, ideally a tall sixth that would make highway cruising quieter and less taxing on the little engine, and its relatively long throw and notchy feel makes it inferior to those found in the Polo, Fiesta and Hyundai Accent.

The clutch has a light action and nice take-up, although – in typical French style – is located too close to the brake pedal and too far to the left to be entirely comfortable.

Combined-cycle fuel consumption is listed as 5.8 litres per 100km, and over our week of mixed driving we used 7.0L/100km – not too shabby with all things considered.

Ride and handling

Peugeot went to great effort to slash fat from the 208 – in the most extreme cases the new model is an amazing 173kg lighter than the 207.

By gumbo, does it feel it.

The 208 is nimble and agile in a way its predecessor never was, with sharp turn-in and an agile feel both in the city and on twisting passes.

The taut suspension keeps the car nice and flat in corners and the quick (albeit overly light) steering makes the 208 a fun little runabout. It’s narrowly shaded by the Polo and Fiesta, both of which have more steering feel and feedback, but it’s a close-run thing.

Naturally, the front-drive car will push wide and understeer if pressed into a corner too quickly, but the electronic stability control is less invasive than many systems and the all-round disc brakes have no trouble hauling the featherweight car up in short time.

We liked the supple and compliant ride, with Peugeot achieving a relatively good balance between dynamics and comfort, although the suspension (independent at the front, space-saving torsion beam at the rear) booms and crashes over bigger corrugations and cats-eyes.

Otherwise, noise suppression is good, with little to report in the way of either wind noise or tyre roar.

Safety and servicing

The 208 last year attained the maximum Euro 5 NCAP safety score.

Standard safety gear includes six airbags, emergency brake assist, stability control, ISOFIX child-seat points and front seatbelt pre-tensioners.

Servicing is capped at $270 a year while the car is under a three-year/100,000km warranty.

Verdict

Chic and stylish, the Peugeot 208 has a lot to recommend it – sharp looks, cool and spacious cabin and nimble handling chief among them. With capped-price servicing, it’s unlikely to burden the buyers with many headaches down the line (at least for the first three years).

However, the engine and gearbox combination falls short of several rivals, and we’d take a good look at price-point rivals like the Polo and Fiesta... and the less expensive Kia Rio, for that matter.

Still, it’s undoubtedly a big step up for Peugeot in the segment, and well worth consideration.

Rivals

Volkswagen Polo Comfortline: , $18,990 plus on-roads ($21,490 for the seven-speed automatic)

Ford Fiesta Zetec:, $20,490 plus on-roads ($22,490 for the six-speed automatic)

Kia Rio SLi:, $19,990 plus on-roads ($21,990 for the six-speed automatic)