Certain nationalities are credited with certain strengths. If you want to know about style, ask an Italian. Food? Consult the French. If, however, it's expertise in engineering you're after, given the choice, most would turn to a German. PSA Peugeot Citroen did precisely this and the resulting partnership with BMW has influenced a range of products including the 120bhp 1.6-litre Peugeot 207 we feature here.

PSA needed a partner with which to develop a new family of small petrol engines and when it comes to engines, expertise doesn't get much more expert than BMW's. The resulting 1.6 and 1.4-litre powerplants are destined to form the backbone of the Peugeot and Citroen small car ranges for years to come with BMW simultaneously installing the units in its MINI range.

The Peugeot 207 1.6 120bhp is a car with Germanic influence on more than one front. As well as having the oily fingerprints of BMW in its engine bay there's a trace of DNA from another celebrated Bavarian marque in the transmission. This model is also available with a Tiptronic gearbox that uses technology borrowed from Porsche.

BMW's input has helped to shape the 1.6-litre 120bhp engine's character. This advanced powerplant uses variable valve-timing and lift to adapt its combustion processes to the demands being placed on it by the driver's right boot. It can thus run more economically under partial loads, opening up to access greater performance when required. Maximum torque of 163Nm is accessible at 4,250rpm and that 120bhp power output comes at 6,000rpm but the 1.6-litre engine feels pleasantly strong from much lower in the rev range. The 10.7s 0-60mph sprint and 125mph top speed should be enough for all but those with serious hot hatch ambitions and Peugeot offers turbocharged versions of this engine with 150 and 175bhp for those tearaways.

"What the engine does offer is smooth power delivery, decent refinement and fuel economy that belies its brisk performance."

The standard fit 5-speed manual gearbox leaves a little to be desired, lacking the punchy accuracy you want in a nippy small car. The other option will appeal to buyers seduced by this car's BMW connection. If you have another £1,000 knocking about, you can order your 1.6-litre 207 with the Porsche-sourced 4-speed Tiptronic gearbox. The system offers the driver a choice of clutchless manual or fully automatic gear-selection. It also has Snow and Sport modes which, in turn, work to maximise traction for slippery conditions and get the most from the engine when you feel like cutting loose.

The 207 represented a big improvement over the 206 in terms of perceived quality. The materials in the cabin look and feel sturdy with no obvious flaws in terms of the way it all fits together. The lower specification models lack some of the fancy detailing you get as you ascend the range but the interior of a 207 is generally a pleasant place to be. Rear legroom is not as good as in some rivals, although there's a trade-off the shape of a 310-litre boot capacity, and the design of the standard ventilation control panel looks a touch dated.

The styling themes that have gradually rolled out across the Peugeot model range are nothing if not distinctive and as with anything so wilfully out of the ordinary, the look of the 207 may not be to everyone's taste. For the uninitiated, the 207's main distinguishing features are those elongated headlamps that stretch back from the nose into the front wings and the huge grinning grille below, its teeth braced by a dark central bumper. Around the back, things are less extrovert but the overall look has real purpose about it.

A step below the flagship performance models in the 207 range, the 1.6-litre 120bhp cars are, nevertheless, offered in the relatively plush Sport and SE Premium trim levels. Sport customers get to select from three or five door bodystyles but the more reserved SE Premium trim is only available in the practical five-door shape. Prices start at £11,925 for the three-door Sport and 13,125 for the five-door SE Premium. Further options are presented by the SW estate model and the CC convertible.

All models get a healthy package of equipment with air-conditioning, remote central locking, a trip computer and a CD stereo. While the Sport trim emphasises the 207's lively side (chrome exhaust, sports seats), the SE Premium comes over all sophisticated (panoramic glass sunroof, fragranced ventilation system). Both cars get 15" alloys, front fog lights and a leather steering wheel.

There's no doubt that 1.6-litres is a big engine by supermini standards but BMW's variable valve timing technology allows buyers to have the benefits a larger powerplant affords without a massive downside in terms of running costs. The 120bhp 207 can still return a creditable 46mpg on the combined cycle and it squeezes-out 40mpg even if you go for the Porsche Tiptronic gearbox. CO2 emissions come in at 145g/km on the manual car but they jump quite significantly to 167g/km in the auto.

The 207 tends to be fractionally more expensive than its major rivals but running costs are rarely anything too drastic with Peugeot products and group 6 insurance should also be manageable if not bargain basement. Basically, buyers pay slightly more for the extra capability this advanced 1.6-litre engine affords.

The reputation that Peugeot once had for producing the best kind of grin-inducing sports hatchbacks has been on the wane in recent years and the 207 has been landed with the unenviable task of regaining some credibility for the marque in this area. The 1.6-litre is not the model for that job, the hot hatch power struggle having taken even the second string warm hatchback contenders out of reach of this 120bhp unit. What the engine does offer is smooth power delivery, decent refinement and fuel economy that belies its brisk performance.

By enlisting the help of BMW for engine development and borrowing some Porsche gearbox know-how, Peugeot have given the 207 an edge both from a marketing perspective and in real-world driving conditions. You'd have to say that the 207 offers more as a quality family car than as a thrilling hot hatch, as a result of its size and general sophistication. That being the case, the 1.6-litre 120bhp engine is a good fit - the engine itself majoring in smoothness and economy with strong but not concussive performance.

TOP 5 207 DEALS

The results below show the top 207 deals on buyacar

	Peugeot 207 1.6 VTi Sport [120] 5dr Hatchback
	ETR	Mthly £199	Saving £2,134	Price £10,936
	Peugeot 207 1.6 VTi Sport [120] 3dr Hatchback
	ETR	Mthly £190	Saving £2,006	Price £10,464
	Peugeot 207 1.6 VTi Sport [120] 3dr Auto Hatchback
	ETR	Mthly £208	Saving £2,208	Price £11,262
	Peugeot 207 1.6 VTi SE Premium [120] 5dr Auto Hatchback
	ETR	Mthly £223	Saving £2,715	Price £12,055
	Peugeot 207 1.6 VTi Sport [120] 5dr Auto Hatchback
	ETR	Mthly £218	Saving £2,335	Price £11,735

typical 12.65% APR

PCP finance quote over 48 months,  10,000 miles pa,  deposit of £1000