Peugeot has followed up the award-winning 308 hatchback with a stunningly stylish, spacious estate. Motoring editor Andy Russell is impressed.

When Peugeot launched the new 308 range it stressed that this was the car that was going to help move its image upmarket in terms of looks and quality.

To some extent that has been borne out by the 308 winning the European Car of the Year title but it is people's perceptions that are really going to make the difference and, on that front, the 308 is also proving to be a winner.

Having driven the 308 at launch and followed it up with a longer test, which just left me even more impressed, I've been driving the follow-up estate version – the 308 SW.

It made me realise that people are certainly seeing Peugeot in a new light with the arrival of this next-generation 308. High-performance sports cars and luxurious limos aside, I can't recall the last time a humble family car made such a big impression on people.

Firstly, they were attracted by the smart looks of this compact – in terms of sector size rather than cargo capacity – load-lugger, often stopping for a closer look before remarking, almost incredulously, that it was a Peugeot. And the 308 SW is a real looker – to my mind the most stylish estate in its class and even smarter than the hatchback. And if people needed further proof of the quantum leap in quality, they just had to listen to the way the doors shut with solid 'thunk' or the expensive grandfather clock-like 'clunk' made by the indicators.

As estates go, the 308 SW also drives extremely well but people are more likely to buy one for its load capacity and, in this respect, it measures up well and does not disappoint.

It may be classed as a compact estate but raise the tailgate and it is anything but with a huge, long boot that is among the best you will find in this segment offering a whopping 660 litres – including 70 litres under the floor – to the parcel shelf. The sloping back screen limits ultimate capacity when it comes to large objects but drop the standard 60/40 split 'Magic Flat' rear seats – the cushions move forward and down as the backs fold completely flat – and you have a maximum 1,775 litres to the roof and a load bay long enough to take a double mattress lengthwise even though one side had to be turned up to fit widthwise. Before anyone gets the wrong idea I was taking it to my son's new home! Runners on the boot floor for adjustable, removable tie-down points and dividers to secure loads, along with a low sill, make the 308 SW a most accomplished holdall. You can even stow the load cover under the boot floor.

It's not at expensive of passenger space with decent legroom in the back but headroom is tight.

It's diesel to the fore in the 308 with the long-serving 92 and 115bhp 1.6-litre turbo diesels joined by new Euro 6 emission standard 120bhp 1.6-litre and 150bhp 2.0-litre BlueHDi units. If you don't do the miles, 110 and 130bhp 1.2-litre three-cylinder turbo petrol engines offer decent performance and economy.

The 308 SW has an extra 11cm between the front and back wheels which makes it feel stable and well balanced through corners, even well loaded, while the suspension is firm enough to give good body control but well damped for supple, comfortable ride quality which is better than many more expensive cars.

The minimal fascia – most functions are controlled via a touchscreen on all but the entry Access model – and raised dials that you look at over the small, sporty steering wheel look good and work well. My only gripe is that the raised front edge of the driver's seat is not ideal if, like me, you have short legs.

Peugeot has built some fine practical, spacious estate cars over the years – the 308 SW upholds that tradition but is as much about quality as quantity.