Peugeot wants its 207 GTi to have other hot hatches on the ropes the moment it enters the arena this month. So it has priced it at £14,995, undercutting recently launched rivals such as the Mini Cooper S and Vauxhall Corsa VXR.

The 207 GTi has the 175bhp turbocharged 1.6-litre engine also used in the Cooper S, which recently won the 2007 International Engine of the Year Award in the 1.4-litre to 1.8-litre category.

The gearbox only has five speeds compared to the Mini’s six, but it will still shift quickly enough to get the adrenaline going.

Thankfully the sports seats are comfortable and supportive, because the car’s ride is hard and its handling direct. Bumps unsettle the 207 slightly, but this merely adds to the driver involvement.

The brakes are powerful and, accompanied by the raft of driver aids now expected as standard equipment on performance cars, ensure minor moments are dealt with safely.

Standard equipment is generous; climate control, leather/Alcantara upholstery, rear spoiler and chrome mirrors and exhausts are all included. Peugeot claims a similar spec Cooper S would cost almost £4,000 more. For an extra £1,000, buyers can select an ‘octane pack’ which includes parking sensors, tinted rear windows, cruise control, tyre pressure sensors, automatic lights and windscreen wipers.

The 207 GTi will not be to all tastes – Peugeot’s full year sales target is a modest 1,000 units – but customers who find the GTi simply too raw can quickly be redirected towards the tamer GT to avoid losing the sale.

Engine: 1.6-litre THP turbocharged petrol: 175bhp
Performance: 0-62mph: 7.1sec; top speed: 137mph
Transmission: Five-speed manual
Efficiency: 39.2mpg (combined); 171g/km CO2
CAP RV 3yr/30k: Not yet available
Rivals: Cooper S, Corsa VXR
Strengths: Performance, equipment, styling, five-star EuroNCAP
Weaknesses: Bone-jarring ride
Opportunity: Brings hot hatch lovers back to Peugeot
Threat: Cheaper rivals
USP: A grown-up hot hatch