The city car rivalry continues to hot up, with Peugeot becoming the latest carmaker to refresh its runabout offering with the 108, a far more stylish and premium-looking car to its 107 predecessor. It’ll need to be good though, with the VW Up and its siblings, the SEAT Mii and Skoda Citigo, leading the field these days, alongside the also very good Hyundai i10. And then there’s the Citroen C1 and Toyota Aygo, which are essentially the same car as the 108 – the result of a joint venture between the brands, with many similar elements inside and out. They’re similarly priced too, with the 108 and C1 both starting at £8,245, slightly less than the more distinctive-looking Aygo which costs £8,595, (although there’s an ongoing launch offer, dropping it to £7,995, seemingly to win the price war). Available in three- and five-door iterations, and with the option of a retractable fabric roof called TOP! (an extra £850), Peugeot is another carmaker pushing personalisation as a way of differentiating the 108 from others, including two-tone paint finishes and three colours for the TOP! roof. Performance 3.5/5 The car is offered with a 1.0-litre VTi 68bhp unit or a new 1.2 PureTech 82bhp engine, which in the standard offering (no stop/start or dodgy semi-auto gearboxes) hit 62mph in 14.3 and 11.0 seconds respectively. The lesser-powered one will be the most popular, as it replaces the 1.0-litre in the outgoing 107, and provides enough grunt for around town. The new three-cylinder PureTech, though, has its place, especially on motorways, where it has some extra power higher up the gears to hold its own amid the exec saloons and SUVs on the lovely M1. Ride and handling 3/5 A city car will never be at the fore of driving dynamics, and the 108 is no different, with a fair amount of body roll and a little too much firmness. It’s not exactly crash-y into bumps and surfaces but remains unsettling for passengers and driver. There’s also the issue of refinement, with plenty of engine, wind and road noise. The 1.2 PureTech is particularly abrasive and far rougher than its 1.0-litre counterpart, with abundant vibration in the cabin. The light steering is well-judged for city driving and parking, though, and there’s a suitably small turning circle. Rivals such as the Skoda Citigo and Hyundai i10 easily win on this front, with a more composed ride, more accurate steering and better refinement. The 108 is still an improvement on its predecessor though, and will be perfectly sufficient for many driving around town. Interior 3/5 The cabin is a big step up from the 107, which is more comfortably and luxurious than before. The plastics remain scratchy in places, and in areas, such as the central console, the materials are flimsy and wobbly. Personalisation makes life more interesting inside though, with themes including Dressy, Kilt, Diamond, Tattoo and Barcode, while the 7-inch touchscreen for infotainment is available on all but entry-level cars. It’s a decent system and can link to some smartphones, making Google Maps accessible on the screen. With four trims available – Access, Active, Allure and Feline - Peugeot expects Active to be the most popular which includes that touchscreen, DAB radio, Bluetooth, height-adjustable driver seat and manual aircon. Space in the cabin is similar to before, so four adults will be relatively comfortable, though naturally we’d recommend the five-door for people regularly using the back seats. Rear space is much-depleted in the fabric roof version, so take this into account. Meanwhile, boot space is up from 139 litres to 196 litres, and the boot lip has been lowered by 20mm for easier access, though it’s still a bit awkward. Costs 4.5/5 Thanks to the carmaker trio sharing costs, the 108 (and C1 and Aygo) have kept prices relatively low, starting from £8,425 and rising to £12,245 for the top-spec Feline 1.2 PureTech version. Top versions, which mean that semi-convertible roof in the mix, add £850 to the cost. The best running costs fall on the 1.0-litre 68 Stop & Start which emits 88g/km CO2 with official fuel consumption of 74.3mpg. That raises to 95g and 68.9mpg without stop and start. The 1.2 PureTech VTi 82, has CO2 emissions of 99g and economy of 65.7mpg – still falling under the 100g/km necessary to be exempt from road tax and the London Congestion Charge. Verdict 3.5/5 The 108 is a better car than its predecessor, with smart looks, good running costs and an improved interior, but it still isn’t a patch on some of the aforementioned city cars, which usurp it in almost every area. Styling will draw some buyers, and it’s good enough to be a respectable alternative to the obvious choices, but remains far from being a class leader.