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The peugeot 405 is dead, long live the Peugeot 406. A newcomer with an old and awesome reputation has entered the lists, and just a snapshot of its family tree is enough of a calling-card. The Peugeot 405 was always the mid-range family car and repmobile that the even the buffs went misty- eyed about.

When the Ford Mondeo arrived with its BMW-like handling and high specification, the 405's nose wasn't as seriously put out of joint as most of the opposition's. The secret of the Peugeot was a superb driver's car nestled inside an unassuming-looking box. The 405 wasn't particularly pretty, nor was it even downright ugly enough to be a head-turner in the street for that matter, but its handling and ride baffled rivals and seduced customers from shopping-run casual drivers to motorway-bashing salesmen.

This engineering distinctiveness just about justifies the new Peugeot's elegantly exasperating TV ad ("Search for the Hero Inside Yourself"), a piece of cynical artiness that looks as if it swallowed the same development budget as the car and which has attracted almost as much attention. But an average car the 406 certainly ain't. It arrives in a crowded marketplace. The new Vauxhall Vectra is one of the most recent additions, and other powerful contenders include the Citroen Xantia,the Renault Laguna and, of course, the Mondeo.

This 406, however, isn't just a revamped 405, which might have been a temptation in earlier times when competition wasn't so fierce and customer expectations of safety and comfort weren't rising so fast. There are sparky new engines, and the suspension has been reworked to make an already precise but pliable ride even more interchangeable with luxury cars costing twice as much. Safety features are better, and cabin comfort and finish are markedly improved. And all this comes for a lot less than pounds 15,000 in the case of the entry-level models.

But though the 406 establishes an impression of restrained luxury the moment you climb into it, and the mechanics are quiet and the controls slick, it's on the move that the car truly declares itself and why it has promptly shot to the top of its league. A horse-fancying friend with no knowledge of automobiles once identified a Lancia I was driving as an "eager" car, and the 406 feels just like that.

It is remarkably agile, and the sense of identity with the car's chassis communicated through the steering wheel is both a thrill and a reassurance. Moreover, this isn't a sensation that grows on you, but something that's apparent from the first quickish bend. Add to that the fact that almost everything it does it does with an almost Merc-like hush, that there's more than acceptable space for the class, and a wide range of models to choose from, and the 406 becomes very tough opposition indeed. Four trim levels and four engines are available, including turbodiesels.

GOING PLACES: The car is a heavyweight, so smaller engines lack urge (0-60mph in approx 12 secs, 50-70 overtaking approx 15 secs for 1.8 litre) but pulling power in mid-range excellent, so it hardly notices. Delicate clutch, smooth gearshift, very silent transmission.

STAYING ALIVE: Driver and passenger airbags, anti-lock brakes, side impact door beams, seatbelt pre-tensioners, anti-submarining seats; rugged bodyshell construction, hence the weight. Handling superb, visibility and driving position good.

CREATURE COMFORTS: Good driver/front passenger space, though headroom not ideal for tall occupants; rear-seat space average only, though better than a BMW 3-series or a Mondeo; boot space the same as the 405, though split/folding rear seats expand it; well-organised controls, very comfortable ride in town or on motorways.

BANGS PER BUCK: Air-conditioning or electric tilt/slide sunroof standard on LX models and above; height-adjustable driver's seat; excellent security features with sophisticated central locking and deadlocks; average fuel consumption around 35-38mpg on motorways, 25mpg in town. One-year general warranty, six years anti-corrosion. Price: pounds 13,695.

STAR QUALITY: Road behaviour, refinement, safety.

TURKEY QUOTIENT: A little heavy for the smaller engines, still not very pretty to look at.

AND ON MY RIGHT: Citroen Xantia 1.8i LX (pounds 14,440): comparable ride, distinctive looking, handling not so sharp; Ford Mondeo 1.8 GLX (pounds 14,910): just as good on the bends, but noisier, less refined; Renault Laguna 2.0 (pounds 13,530): luxurious feel, spacious, let down by engine and feel of controls.