Do you remember the Peugeot 306? I do. I used to lust after the 306 GTi-6, almost accepting a job in what has been voted the least desirable city in Britain on the strength of getting one as my company hack. The 306 wasn't the prettiest or the most practical hatchback and even for the time, the interior was a sea of thin plastics but it drove brilliantly. It was touched by genius. Then it was replaced by the Peugeot 307, a car that was touched heavily with worthiness. This 308 is a progression from the 307 and aims to inject some extra sparkle, even in entry-level 1.4-litre form.

On any objective basis, the 307 was a markedly better car than the 306, outscoring it in most regards that really mattered to family motorists and Peugeot was rewarded with strong sales. Its successor, the 308, follows a similar theme. It's not exciting but it's what many families want; safe, well built, modern and affordable.

The four-cylinder 1.4-litre engine does a game job but the 308 is a very big family hatch and as such, performance is hardly skull-crushing. It'll get to 60mph in 14.3 seconds and continue to a top speed of 114mph thanks to the slippery aerodynamics but it's worth reiterating that this is not a car that will appeal, 306 style, to keen drivers. In corners the 308 feels tall and there's some kickback through the steering if you push it harder than it feels comfortable with. Beyond this there is gentle understeer, but this is well telegraphed and if you throw another £300 at the package, you can get electronic stability control which will even dial this out safely.

Somewhat surprisingly for a car with no real focus on handling, the 308 rides fairly firmly. It never feels totally supple over surface imperfections but it gels nicely at motorway speeds, where there's a signal lack of floatiness, and the steering is decently weighted. Visibility is better than in the 307 with less intrusion from the windscreen pillars. The 1.4-litre engine is surprisingly tractable for such a small capacity unit but gets rather vocal if thrashed and you will need to rev it to make progress, the peak power of 95bhp coming at a heady 6,000rpm.

"The Peugeot 308 is a car that chooses its battles wisely."

Riding on a similar wheelbase to the 307, the 308 inherits the same taller than average roofline. This is used to good effect in creating a roomy and airy interior but by shaving 12mm from its height while growing in terms of both length (by 74mm) and width (by 85mm), it achieves a far more dynamic stance than the old car. The long front overhang of the 308 adds to this impression, creating a wedge-shaped profile that brings a further sporty element to the car's shape and assists in pedestrian safety. Those familiar with the Peugeot 207 supermini will find plenty they recognise in the 308 but the key differences on the larger car are the prominent V-shaped bonnet that extends down from the base of the A-pillars on a raised plain and the huge oblong foglights. The rear of the 308 has more of a bulbous look to it, helping to maximise luggage space that runs to 430 litres and can be extended to 1,398 litres by folding the rear seats.

The interior takes a sober but classy approach. It feels notably more upmarket than inside of the 307 and even more spacious. The higher specification models in the range are embellished with liberal use of chrome and all derivatives benefit from expensive-looking plastics with the lighter colour options proving particularly eye-catching. The middle section of the dash slopes down into the centre console bringing its controls closer to the driver and creating a snug cockpit effect but you sit a long way back from the base of the steeply raked windscreen with a huge expanse of dashboard to look out across. This, combined with the 308's long front overhang, may present problems when manoeuvring but the A-pillars, a constant impediment to the driver's view in the 307, appear much thinner for improved visibility.

Two trim levels are offered with the 1.4-litre engine, namely Urban and S. Urban is the entry-level specification and starts at £12,295 for the three-door car with the five-door model adding £600 to the asking price. Equipment on all variants runs to power steering, remote control central locking with deadlocks, electric front windows, a steering column adjustable for reach and rake, a CD player, height adjustment for both front seats, a trip computer and electrically operated door mirrors. The S model adds air conditioning, body-coloured mirror housings and door handles and Atacama rather than Pacaya design wheel trims for the 15-inch steel wheels.

Options for these models include the highly recommended ESP stability control package, and metallic paint. Go for the S trim and you can then replace the rather weedy single CD stereo with a beefier Clarion stereo upgrade with MP3 compatibility and a Bluetooth interface. ESP, aside, Peugeot hasn't skimped on safety kit and there are seven airbags included. Five-door buyers can add to this count with rear side airbags if they want to. There's also ABS with EBD and EBA (or anti-lock brakes with brakeforce distribution and brake assistance in laymans' language).

Peugeot is proud of the fact that some of the best aerodynamics in the sector have been achieved with the 308. A drag coefficient of 0.29 will mean little to most buyers but the resultant slippery styling and fuel economy advantage should strike a chord. The 1.4-litre engine will achieve fairly decent fuel figures on paper with Peugeot quoting a 43.5mpg average, but load it up with family and gear and that figure will take a sharp tumble. The trouble is, the entry-level diesel is a hefty £1,300 dearer, but over three years most drivers will recoup the premium, the 1.4-litre Urban weighing in with a pence per mile figure of 34.7, while the 1.6HDi Urban diesel costs 32.9ppm to run.

Very cheap servicing counts in this car's favour and excellent safety and security contribute to affordable insurance. Residual values, however, have been adversely affected by a public perception that the 308 is more of a 307.5 than a totally new proposition.

The Peugeot 308 is a car that chooses its battles wisely. Its manufacturers realised that families are looking for safety, space, affordability and quality design and have tried their best to tick those boxes with a modest development budget. You'd have to take your hat off to Peugeot and say that on those scores, the 308 is an unqualified success. Where the big caveat comes is that many rival manufacturers also have those requirements squared away and blend features such as driving fun and a sharper sense of aesthetics into the mix.

The 1.4-litre engine isn't the most impressive unit in Peugeot's line up and if I was spending my own money, I'd probably spring for the entry level 1.6 HDi diesel but if you are cash strapped and a Hyundai or Chevrolet isn't doing it for you, the 308 1.4-litre makes a very tempting and understandable selection.