WITH lashings of style, a very impressive interior and performance to match its looks, the Peugeot 208 is in great shape to challenge the established market leaders.

Add to this mix a smooth eight-speed automatic transmission system driving the front wheels, a fuel economy figure of around 50mpg and the sort of dashboard and instrument panel that is up there with the best of them and you have a winner on most fronts.

On the downside, it's rather expensive at £24,525 the price you pay for the model tested here, the GT 130 Auto - but prices start at a reasonable £16,250 for the entry-level car with less power, lower specification and a manual gearbox.

There's definitely a wow factor as you settle in behind the slightly oblong small steering wheel that nestles lower than the 3D digital instrument panel. It certainly makes offerings from some other manufacturers feel decidedly dated.

The 10-inch touchscreen (lower trim levels get a seven-inch version) offers clear and quick reactions to inputs but the handy piano-key like buttons sit rather confusingly above a row of touch-sensitive icons.

The interior can also be personalised with a choice of eight LED mood lighting colours. All driving information can be easily accessed through the  i-Cockpit cluster, which projects information on different layers, giving a3D effect.

The GT's turbocharged 131bhp engine is both capable of a decent sprint time and a pleasant city drive in comfort. Coupled with the automatic transmission and superb steering, it makes for smooth progress with the minimum of effort.

You might want to consider the lower-powered PureTech 100 engine if the extra pace of the 130 is not necessary.

Parking sensors come as standard on the 208, but GT Line spec and above get the all-important rear view camera and automatic LED headlamps that avoid dazzling oncoming vehicles.

On the outside, Peugeot has included some attractive features such as gloss black wheel arch extensions and window surrounds, twin exhaust pipes and a black roof.

Underneath, the highly adaptable chassis can accommodate petrol, diesel and electric powertrains.

It's certainly stylish and is a further feather in the cap for Peugeot after a string of design successes with its SUV range.

Interior space is fine if you are sitting in the front seats, but quite limited if you are riding in the back.

There's a decent amount of luggage space and a 60/40 split for the rear seats.

But the overriding factor here is the plush and modern ambience you sense immediately on entry. Soft-touch materials abound, along with piano black trims and leather seating.

The hushed ride it offers comes as something of a surprise when you consider that this is small car with a punchy engine.

The 208 had to sit in the shadow of the Ford Fiesta and Vauxhall Corsa for almost a decade, but not any more.

Awarded the title of European Car Of The Year award last year by a panel of 60 motoring journalists, it is now not only a challenger to those two cars but also the likes of the Mini and Audi A1.

With diesel and fully electric versions to consider too, Peugeot calls it "unboring the future". There's certainly a lot about the 208 to make you sit up and take note.

AT A GLANCE

Peugeot 208 GT 1.2L PureTech 130 Auto

Price: £24,525

Engine: 1.2-litre three-cylinder turbocharged petrol, producing 131bhp

Transmission: Eight-speed automatic driving front wheels

Performance: 0 to 62mph in 8.7 seconds; top speed 129mph

Economy: 46.0 to 51.9mpg

CO2 emissions: 103g/km

RATINGS

Performance: ****

Economy: ****

Ride/Handling: ****

Space/Practicality: ***

Equipment: *****

Security/Safety: ****

Value For Money: ****

OVERALL: ****