PEUGEOT Australia has launched its new 3-series model, the 308, in Australia with an emphasis on style and efficiency.

Following on from the 307, the all-important new small car is an integral part of Peugeot Australia's growth plans.

It is mostly new apart from two carry-over diesel engines and picks up the bold front-end styling of the latest Peugeot corporate look.

Prices for some models remain the same and some have risen slightly, including the base petrol model that costs $500 more at $25,990.

Surprisingly, the base petrol and diesel models don't come with electronic stability control as standard.

The potentially life saving feature, which is standard fit on cheaper vehicles like the base model Mitsubishi Lancer at $20,990, is a $450 option.

Peugeot offers four engine variants for the 308, including two carry-over diesels and a two petrol engines introduced for the smaller 207 model.

The naturally aspirated 1.6-litre four-cylinder petrol base engine delivers 88kW and 160Nm.

A turbocharged version of the same engine lifts power to 110kW and 240Nm when used with a manual. When teamed with an automatic, the power dips by 7kW.

Both petrol engines, which are the fruit of a joint development with Peugeot-Citroen are available with five-speed manual or four-speed automatic transmissions.

The entry level turbo diesel is a 1.6-litre four-cylinder with 80kW and 240Nm.

A 2.0-litre four-cylinder turbo diesel lifts power to 100kW and 320Nm.

The 1.6-litre diesel is only available with a five-speed manual, while the larger oil-burner comes standard with a six-speed manual, while a six-speed automatic is optional.

Peugeot Australia expects diesel to account for 64 per cent of 308 sales.

It's emphasizing the efficiency of the 308 engine range rather than its performance.

The fuel efficiency story is a good one with the entry level diesel recording an impressive combined figure of just 4.9 litres per 100km. The bigger diesel records 5.5L/100, the naturally aspirated petrol uses 6.7 litres for 100km and the 1.6 turbo is still not too thirsty at 7.1L/100km (the figures are slightly higher for autos).

Compared to the 307, the 308 is 74mm longer, 53mm wider and the front track is 30mm wider, while the rear track is 16mm wider.

Stung by some criticism that the previous looked a bit strange due to its overly tall body, Peugeot has dropped the roof height of the 308 by 12mm and altering the exterior styling make the car look as though it is sitting lower to the ground.

The front of the 308 is dominated by the V design nose, which gives the car a much bolder appearance along with a bigger grille and more prominent lion badge.

The rear is a milder evolution of the previous model, with the rear hatch glass wrapping around part of the C-pillar, while the tail-lights have a more streamlined look.

The interior is all-new with a simpler and more logical layout. Peugeot designers set out to give the 308 a more upmarket interior to match its premium price position, using higher quality materials and design details to set the vehicle apart from more mundane small hatchbacks.

Split-fold rear seats are standard for the 308, which also features a ski-port to transport long items with the rear seats in place.

Compared to the 307, bootspace is down from 520 litres to 430 litres (measuring the bootspace up to the parcel shelf).

The 308 sits on the Peugeot-Citroen 2 platform and runs a rear torsion beam suspension set-up, while it uses a MacPherson strut system at the front.

The bonnet is made from aluminium to save weight, but the 307 is still relatively heavy with the XS model tipping the scales at 1362kg and the porky XTE diesel weighing 1522kg. On average, the 308 is around 80kg heavier than the 307.

Peugeot says the new 308 has a 10 per cent stiffer body and incorporates three energy absorbing structures.

The passive safety package includes dual front, side and curtain airbags which are standard on all Australian cars.

XSE and XTE models are also available with an optional steering wheel column-mounted knee airbag for $250.

All 308 models feature anti-skid disc brakes with electronic brake force distribution Electronic stability control is standard on all models except for the XS base cars.

All 308 models feature a chilled glovebox, there are two drink holders in the centre console, a narrow storage tray slides out from under the front driver and passenger seats and there is another shallow 'hidey-hole' compartment built into the rear parcel shelf.

The XS (1.6) petrol model kicks off the 308 range at $25,990, with the automatic adding $2000, while the diesel XS (1.6) costs $29,990.

Apart from the safety features mentioned previously, the base XS models come standard with airconditioning, cruise control, trip computer, power mirrors, MP3 player plug in glovebox, dual climate control airconditioning, front armrests, CD sound system with steering wheel mounted controls.

The XS models make do with 15-inch steel wheels.

The XSE non-turbo petrol automatic costs $30,390, while the XSE petrol turbo manual is $30,590 and an auto version adds $2000. The 2.0-litre diesel engine is available in XSE grade for $33,590 for the manual and $35,790 for the automatic.

XSE models come with the same gear as the XS, but add electronic stability control, front and rear seatbelt fastening indicator, sportier front grille, 16-inch alloy wheels, white instrument dials, rear parking sensors, automatic headlights, rain-sensing wipers, leather-wrapped steering wheel and rear seat centre armrest with cupholders.

The range-topping model is the XTE at $34,990 for the turbo petrol automatic, while the XTE (2.0) diesel automatic costs $37,990.

XTE models add a fragrance diffuser, panoramic sunroof, electric folding wing mirrors, illuminated vanity mirrors for driver and passenger sunvisors, tyre pressure monitors, five-disc CD sound, sporty rear bumper, 17-inch alloy wheels, anti-dazzle electro-chromatic rear-view mirror and door sill-mounted ground lights.

Satellite navigation is available as a $3600 option on all models except for the XS as part of the RT4 media package that includes a 30-gigabyte hard-drive for storing music and navigation information, uses 7-inch colour screen and can be controlled using voice recognition.

The screen pops up out of the top dashboard, in the centre above the air-vents, a location aimed at reducing the time the driver takes their eyes off the road to look at the screen.

Other options include leather trim for $2900 on all models except XS cars, while XTE cars can also be fitted with premium leather trim $4500, metallic paint is a $700 option on all cars, a panoramic sunroof is available for $1000, a hands-free phone kit costs $700, while larger wheel upgrades are available across the range for between $500 and $900.

Peugeot says the new 308 was put through a grueling development process, which saw prototypes cover 2 million km, twice the amount covered when developing the 307.

Special attention was paid to improving interior quality and targeting interior squeaks and rattles.

Peugeot Australia sold 4119 of its 307 last year, including hatch and Touring (wagon), and expects to sell around 3650 of the 308 this year and around 1100 of the 307 it has left.

The 307 Touring model will continue until around June, when it is replaced by a 308 Touring.