Peugeot has been dwindling in a sea of car mediocrity for far too long in many sectors, unable to match tough competition from more favoured carmakers. But the tide has been slowly turning, with praise for the 508 and 208 in recent years. Now, its new family hatchback, the 308, is a perfect example of Peugeot raising its game versus models like the Volkswagen Golf, Ford Focus and Vauxhall Astra. Built on a fresh platform, that’s lighter and leaner, and with a strong focus on a high quality stylish interior, this model is eons ahead of its predecessor, the 307. Performance 3.5/5 We tested the most powerful engine in the range, the 1.6-litre 156bhp petrol engine, achieving 0-62mph in 8.4 seconds with a top speed of 132mph. And this engine is sparky, particularly from take-off, proving itself as the (predictably) most fun unit in the line-up. Pushing it from mid to high speed on the motorway, however, errs towards a struggle – your foot’s down to the floor, yet you’re not picking up pace quite as much as you’d expect. On the other hand, it’s perfect for quick getaways at endless traffic lights in towns, while there’s enough reserve to enjoy it on some A and B-roads. Ride and handling 4/5 Ride in the 308 is good – it’s on the soft side, but absorbs bumps well, while handling is worlds apart from the 307 – that felt laboured, whereas this feels nimble and agile. Peugeot has opted for the smaller steering wheel found in the 208 supermini and 2008 crossover. It creates a more connected feel, but takes a while to adapt to, with steering inputs more noticeable thanks to the reduced diameter. Still, steering is nicely weighted, if occasionally inconsistent. Ultimately, it’s a lively drive, so whereas it’s not as involving as a Focus or the driver-orientated BMW 1 Series, it achieves a good middle ground, blending decent driving dynamics with a comfortable ride. Interior 4/5 Peugeot has overhauled its cabin design, opting for an incredibly simplistic look that means buttons are kept to a sparse few; instead, everything is controlled through the touchscreen. As a result, there’s much more black plastic on show than a typical car, so it’s lucky that interior materials are so impressive, coming close to meeting Germanic luxury brand standards. Rear passengers will be fine, but space here is a little limited. The panoramic sunroof, although a nice addition, means even more headroom is lost in the back seats. Where the 308 wins hands down against rivals is boot space. It has a gargantuan 470 litres of space, compared to the Ford Focus at 316 litres and the VW Golf at 380 litres. Equipment 4/5 Specification on the 308 is impressive, even on entry-level trims – Access includes cruise control, DAB radio and Bluetooth, while the next step up, Access, adds sat nav, 9.7-inch colour touchscreen, rear parking sensors, automatic headlamps and electric driver lumbar support. Penultimate top trim Allure gets reversing camera and front parking sensors as well as electric-folding door mirrors. And the Feline trim, as tested, features tinted rear side windows, emergency collision alert and emergency collision braking system, as well as those 18-inch alloy wheels and the panoramic sunroof – sure to keep little ones mesmerised in the back. Running costs 3.5/5 As the fastest car in the range, this isn’t the most sensible choice for the frugal-minded. However, Peugeot claims fuel economy of 48.7mpg - we managed mid-thirties – and CO2 emissions of 134g/km. This top-trimmed version costs £21,345; the entry-level Access trim of this engine is priced at £15,695. The equivalent VW Golf, the GT 1.4 TSI ACT, that matches the 308 for 0-62mph figures, costs £2k more at £23,450, but offers considerably better running costs, at 58.9mpg and 112g/km CO2. Verdict 4/5 This is, without doubt, the best compact hatchback that Peugeot has had in a long time. It offers better value for money than a Golf and has closed many gaps around build quality, comfort, refinement and looks. It still isn’t the clear winner in this fierce class, but it’s not far off.