It would be difficult to over-estimate the importance of Peugeot's new 207. The small car, a rival for the Ford Fiesta and Vauxhall Corsa, was launched earlier this year to great acclaim.

It helped the company increase sales in a shrinking market and it recorded 16,000 sales in its first four months - more than its predecessor the 206 managed when it was launched in 1998.

At the heart of this success are the sports versions, and there are nine to choose from, spanning four engine sizes in both three and five-door formats.

The test version is the 1.6 three-door model. The three-door is the prettiest of the two styles and the 1.6 litre engine is the most impressive.

It's quick, capable of 60mph in 10.6 seconds which it manages smoothly, and feels even quicker thanks to sporty gearchanges.

It's a well turned out car, with all the sporty signatures such as deep skirts and body-colour trim, alloy wheels and air conditioning. It also has powered windows and a CD system.

Essentially, the 207 is an impressive car. It looks fresher and sportier than any of its key rivals and although it costs a little more it does hold its value well and comes better-equipped. Peugeot's aim to create a stylish trendsetter seems to have been accomplished.

Safety is also a key feature, with six airbags fitted as standard, and the model claims to break new ground in offering pedestrian protection. The 207 has also been designed to meet and beat the EuroNCAP tests.

The 207 is the latest version of the Peugeot 2' dynasty, which has seen 13.2 million models sold since the launch of the 201 in 1929. The 206, which replaced the 205, was the best-selling Peugeot ever with 5.4 million sales. Peugeot says its sales have grown by 50 per cent since 1998 and its B' segment cars (such as the 207) have increased by 80 per cent.

PRICE: £11,395 What Car? says you could get it for £10,701.

ENGINE: A 1,587cc four cylinder unit generating 110bhp.

PERFORMANCE: Top speed 120mph, 0-60 in 10.6 seconds.

COSTS: Averages 40.3mpg.

EMISSIONS: 166g/km.

WARRANTY: Three years, 60,000 miles.

INSURANCE: Group 6.

All T&A road test vehicles are independently selected and assessments are carried out impartially by members of our own staff who base their opinions only on the vehicle supplied for these purposes by the manufacturer.