We like
Outstanding economy, ride/handling, seven-seat layout, space, comfort

Room for improvement
Manual gearbox only

PEUGEOT'S latest turbo-diesel pushes the argument that oil-fired engines have a definite place - even in Australian society. Despite the fact that, unlike Europe, where diesel is relatively cheap and fuels about 30 per cent of all passenger cars, Australia has never been a popular market for oil-burning sedans.

Although there are plenty of arguments to support diesel - significantly better fuel economy and low emissions of hydrocarbons, carbon dioxide and carbon monoxide - the downsides of poor acceleration, an excessive output of exhaust particulates and highish carbon dioxide emissions have conspired against popular acceptance.

And diesel fuel has not exactly been cheap here in the past either, although now it shows signs of generally being close to parity with petrol.

Among the few importers who have catered for the passenger diesel market, Peugeot has been consistently active, most notably with the 505 turbo-diesel during the 1980s and more recently with the 405 and 406 turbo-diesels.

From 505 to 405 to 406, unfolding technology has given us quieter, more powerful diesels that still manage to put petrol engines of similar performance to shame in terms of fuel consumption and exhaust emissions.

And now, in the latest version of the 406, Peugeot brings us the next generation of diesel engines.

Yes, it comes as no surprise to hear the latest Peugeot oil-fired engine is quieter, faster and cleaner, but what really grabs attention is the dramatically reduced fuel consumption. So frugal is this engine that the company speaks of potential cruising ranges up to 1500km from its 70-litre tank.

The quoted open-road figure of 4.6 litres per 100km is in micro- car territory. Its city cycle figure is identical to the highway cycle figure for the petrol V6 used in SV Peugeots.

The 2.0-litre engine produces 82kW and 255Nm - figures (especially the torque, which is not far behind the 3.0-litre V6) that would not shame a normally aspirated petrol engine.

Peugeot spent the equivalent of $750 million on the new engine which gets its impressive characteristics through technologies such as computer managed fuel-injection, optimised structural design to decrease weight and noise, and a program that reduced internal friction by 6 per cent compared to the previous 2.1- litre diesel.

So the engine is quieter over its operating range by up to eight decibels, produces 20 per cent less carbon dioxide, 40 per cent less carbon monoxide, 50 per cent less unburned hydrocarbons and 60 per cent less of the dreaded diesel particulates.

Peugeot says the new engine also produces virtually no smoke over 95 per cent of its operating range - a big achievement when you conjure up traditional images of cloud-belching diesel trucks pounding the interstate routes.

The new Peugeot diesel is available in manual transmission 406s only, in ST sedan and station wagon versions.

The diesel wagon makes an interesting proposition because, recognising its family car status, it gets seven seats as standard, where the upmarket V6-engined SV wagon gets two fewer seats.

Certainly the HDi wagon makes a lot of practical sense.

It is a relatively big wagon with good space for five passengers in the first two rows of seats and a large, relatively unobstructed cargo area concealable under a roll-out blind. The rear backrest is split-fold to make the most of passenger/cargo combinations.

The fold-out additional seats are for children only and, even if initial operation seems a little tricky, they become easier to set up after a few tries.

Safety equipment includes the latest generation Bosch anti-lock braking - working in concert with a new brake force distribution system - dual airbags with more progressive deflation to help prolong the protective phase, taller headrests and pyrotechnic sweat belt pretensioners. All passengers also get lap-sash belts.

Unfortunately side airbags, standard on 406 coupe and SV models, remain optional on ST Peugeots.

The interior tends to be a cosy place, well up to expectations of a mid-$40,000 wagon and made better by recent upgrades that have given the base car climate control air-conditioning, rain-sensing windscreen wipers and a third headrest in the centre row seats.

The ST's velour seats are well shaped and supportive, better than the previous model with a longer cushion and more supportive contours, as well as height adjustment on the driver's side.

The instrument panel layout is laid out European style, not quite as simple to read as some Japanese but still ergonomically sound. A breakthrough for Peugeot is the location of the horn button on the steering wheel centre pad rather than a steering column stalk.

New door panels with more ergonomic, re-profiled armrests up front and the odd splash of brushed aluminium help freshen the overall look of the 406 too.

To drive, the turbo-diesel wagon proves to be an entirely practical conveyance with the engine's impressive torque allied to the benefits of the supple Peugeot ride. It is not quite as absorbent as the petrol engined models though, because diesels are beefed up slightly to cope with the extra weight and to allow for the rearmost seats.

That said, the car remains one of the most competent in its category in terms of ride and handling abilities. The ride at first might feel nothing special but after some time the wagon shows its mettle with good impact absorbency, nice pitch control and a lack of underbody crashes and thumps. The steering is nicely weighted and offers good feel, contributing to what is best described as crisp handling.

Noise levels are also low for a wagon, due no doubt to extensive work by Peugeot on damping panel vibration and strategic use of insulating material.

And the engine. Yes, it is pretty quiet as promised, and it does deliver a healthy surge of power both initially and in the mid- range. The manual transmission is no close-ratio sporting type but the engine's torque is sufficient to cope with the somewhat wide gaps between gears - and with the very high, economy-biased top gear. An auto option would be nice.

On start-up, there is some initial clatter before the cold innermost workings begin to warm up but it is certainly nothing like the diesels of old. A big surprise is that unlike most diesels, which require a wait for glow plugs in the combustion chambers to bring the temperature up to operating levels before the engine can be started, the Peugeot can be fired up instantly provided the temperature is over zero degrees.

The latest 406 also looks better.

The front end looks more slick with its swooping lights and mesh grille. The Peugeot also sees its way at night more clearly with new headlights featuring double parabola design and H7 halogen globes. Unlike sedan 406s, the wagon remains essentially untouched at the rear.

Overall, the 406 turbo-diesel wagon makes good sense as an entry level prestige workhorse that mixes practicality with driving pleasure, comfort and economy of operation. Combine this with its unmistakable French character and the Peugeot is worth serious consideration.