DO not let the size of Peugeot's 207 fool you. It might be a small car, but it is a vitally important one for the French car maker.

Cars starting with the number two account for almost a third of Peugeot's total production - and most of that has been in the last 20 years.

The 207 follows the super-successful 206, which has sold more than five million since its launch eight years ago and will carry on in production.

If continuing to build the 206 seems an odd decision, just consider that Peugeot's sales in the small car market have risen by 85 per cent in the past seven years, so the more choice you have to offer the better - hence Peugeot's rapidly expanding range of small cars -107, 1007, 206, and now 207.

The target for the new 207 is the small family, looking for a safe, stylish, fun car and it delivers on all three counts.

Made in three- and five-door versions, with six engine options, the 207 comes in two 'looks' - the softer-looking Classic and the Sport, which is highlighted by circular fog lights mounted in chrome surrounds.

The Sport test model was powered by the 1.6-litre engine that tops the diesel range, giving a heady 110 horsepower to play with.

Fuel consumption hovered around the 50mpg mark, according to the on-board computer, but I couldn't reach the 58.8mpg combined consumption achieved in Government tests.

Like the 206, the 207, priced from £8,995, is a cracking, solid car to drive, delivering excellent handling and a ride worthy of a much larger car.

In addition, all 207s are equipped with an anti-lock braking system that prevents wheel lock-up, and electronic brake force distribution, which allows the full braking potential to be used by delivering the maximum possible braking force to each wheel. Emergency braking assistance and automatic illumination of hazard warning lights in the event of sharp deceleration are also standard features.

The GT test model came with an electronic stability program, which is also available as an option on all models except the entry-level Urban.

Anyone who has driven a 206 will feel instantly home in the slightly larger and chunkier 207, which has sailed through Euro NCAP crash tests with a maximum five stars for adult occupant protection and four for child occupant protection.

And it is not just the occupants that came into the design equation.

Peugeot says the safety of pedestrians was taken into account during the earliest stages of the design of the 207 to ensure the hatchback's compliance with a new European directive.

Auto facts Peugeot 207 GT HDi 110 3dr

  • Price: £14,745
  • Insurance group: 7E
  • Fuel consumption (Combined): 58.8mpg
  • Top speed: 120mph
  • Length: 403cm/158.7in
  • Width: 192cm/75.6in
  • Luggage capacity: 9.5 cu ft
  • Fuel tank capacity: 11 gallons/50 litres
  • CO2 emissions: 126g/km
  • Warranty: 3 years/60,000 miles