The all-new stylish 308 takes Peugeot to new levels of quality, style and value, says motoring editor Andy Russell.

Peugeot's vision for its all-new 308 hatchback is as clear and bright as its full LED headlights – to be a serious rival to Volkswagen's Golf.

So proud is Peugeot of those new headlamps, standard on the top two models, that the 308 launch started from a pitch black aircraft hangar and a night drive on country roads.

Because the new model is still called 308 don't be fooled into thinking it is a mere facelift. Peugeot's new badging is to have a family of '08' cars – 208, 308, 508, 2008 and 3008. The new 308 is clearly a Peugeot lion but a very different beast.

Peugeot has focused on four key areas in its bid to rival the Golf – efficiency, design, driving experience and quality with some of the 308's highlights including:

n Cutting weight by 140kg – the new platform accounts for 70kg, other savers include an aluminium bonnet and front wings and world-first reinforced plastic tailgate.

n Class-leading CO2 emissions and lower fuel consumption but more power and torque from the engines.

n Two million test miles before launch – more than any other Peugeot.

n A focus on driving up residual values.

n More equipment but much lower, more competitive pricing.

n A measure of how improved the 308 is that 116 patents were filed during its development.

n New testing methods and objectives for a 'like new' quality feel after three years of use.

The new 308, now an eye-catching, stylish hatchback, is slightly smaller than the previous model and the most compact hatchback in its segment but the new platform has allowed better packaging with shorter front and rear overhangs and wider tracks so there it is just as spacious inside while the class record-breaking boot has grown to 470 litres including 35 litres of underfloor storage compartments. The well-shaped loadbay rises to 1,309 litre with the 60/40 rear seat backs folded flat but there is a step up from the boot floor.

Front-seat passengers have ample space but legroom in the back falls short of the class-leaders but is adequate for adults – no mean achievement given the whopping loadbay – but headroom is limited if fitted with the panoramic glass roof.

The interior design has also overcome many of the compromises of switching from left to right-hand drive. A central air-conditioning unit avoids intrusion into the right-hand footwell so UK models now have a large footrest and better pedal layout. Unfortunately the glovebox is still tiny but you can't have everything!

From launch the 308 is offered with 82bhp 1.2 petrol and 125 and 156bhp 1.6-litre turbo petrol and 92 and 115bhp 1.6-litre turbo diesels. The turbo petrol and diesels do a good job and feel strong but the big boost comes in spring with new Euro 6 emissions standard units – the 110 and 130bhp 1.2-litre three-cylinder turbo petrol and 120bhp 1.6 and 150bhp 2.0-litre BlueHDi turbo diesels, the latter cutting nitrogen oxides by up to 90%. The 1.6 BlueHDi emits 82g/km of CO2 with 91.1mpg combined while the more powerful units will also be offered with new six-speed automatics.

Being shorter, wider, lower to the road and lighter than its predecessor means the suspension could also be made lighter and that pays dividends in the way the new 308 drives. With its wider, lower stance it feels firmly planted through corners – as demonstrated on a go-kart track's tight turns – and rides well even when fitted with bigger wheels.

The new i-Cockpit has a classy, minimalist feel, wiping out fiddly small buttons with most functions controlled via an intuitive 9.7in colour touchscreen on most models. A small steering wheel feels sporty and allows the driver to see the high-level dials over the top and the needle of the rev counter on the right goes anti-clockwise, which looks odd at first, for better visibility.

The whole perception of the new 308 is one of quality in terms of materials, design and ambience. The upmarket feel is backed up by attractive equipment in Access, Active, Allure and Feline trim levels.

The 308 is a huge leap forward for Peugeot, taking the brand to a new level of quality and appeal at the right time as buyers increasingly look to smaller cars.