The car that jumped a class

This car looks like a regular Peugeot 406 to you, I expect, so you may put it in the same category as a Ford Mondeo or a Vauxhall Vectra. After all, the 406 has been a huge success in Britain; its French maker says it has sold faster here than any Peugeot before it. So it fits in perfectly as a mainstream family car, its attractions over its rivals being a better combination of ride comfort and handling, and svelte looks created mainly by Italy's Pininfarina design studio.

But there is, of course, another zone of the motorscape, inhabited by cars of prestigious aura and German identity. Buy a BMW, an Audi or a Mercedes-Benz and you are seeking an expression of tastes and values and, dare it be said, status. Yet are these cars really better? Drive this 406, and you may well wonder.

Under this 406's bonnet lies a new engine that makes it harder than ever to sustain a rational case for class distinction. It's a V6 engine, nearly three litres big, with 24 valves, all-aluminium construction, an output of 194bhp and impeccable design credentials. As with the earlier Peugeot V6 engine, which never found its way into the 406, the new one is a joint venture with Renault. Its next appearance, however, will be in the Citroen Xantia, another product of the Peugeot group.

For now, though, it's a 406 exclusive. If you have driven a regular four-cylinder 406, you will know that the engine is not its strongest point. It's smooth and quiet, but even the 2.0-litre version feels as flat as a pancake. The gear change is loose and clonky, too, albeit speedy of shift. All this has been remedied to dramatic effect in the V6 version.

Instead of being a mere mechanical device to pull the car along, the V6 engine has a voice. It sounds creamy and powerful, emitting a sophisticated snarl as you accelerate. Peugeot claims that the 406 V6 will smooth its way from a standstill to 60mph in 8.0 seconds, but I have measured its abilities at a test track and it will do it in 7.3. That's quick; less usefully, so is the 143mph top speed.

Because this engine pulls so effortlessly, as indeed a 2.9-litre engine should in a car that is not especially large, you don't need to use the gear change much. But when you do, you'll find it precise, smooth and pleasingly substantial. The 406 V6 is so easy and pleasing to drive smoothly that only the laziest, most ham-footed driver would favour an automatic transmission. It's not available yet, but will be soon.

Add the 406's usual prowess at stringing together a series of demanding bends and soaking up the bumps, and you have a highly appealing car, apart from one flaw: this 406's steering uses a so-called Servotronic system of power assistance, which makes it feel disconnectedly light at low speeds. Peugeot's regular arrangement feels much more natural, although at higher speeds the "meat" returns.

The 406 V6's capabilities confirmed, we can now ask the question hinted at earlier. Is there any point in buying something German and status- enhancing, when the 406 is this good? Leaving image and brand values aside, we find a car whose doors shut as solidly, whose paintwork is as lustrous, whose body panels fit as snugly, whose interior fittings feel as substantial. My experience of well-used 406s to date suggests it will stay this way, too. The 406 is Peugeot's most meticulously honed car to date. Now that it has the engine to match the ambience elsewhere, it moves into a new league.

This league, mid-sized saloons costing upwards of pounds 20,000, is inhabited by cars such as the pounds 21,030 BMW 323i (a 2.5-litre straight-six), the pounds 25,234 Audi A4 2.8 (a V6, like the Peugeot), and the pounds 27,840 Mercedes-Benz C280 (a straight-six, but soon to gain a new V6 engine). All those prices are for the cheapest versions, but you can get a 406 V6 for pounds 20,000 (unfortunately designated GLX, which cheapens its aura). That's more than you'd pay for a Mondeo or Vectra V6, but it's also a much more complete car. Alternatively, pounds 23,000 buys you a plusher 406 V6, this time with no extra designation, containing leather trim, air-conditioning, a CD player, electric seat adjustment and many other non-essentials but desirables.

This pricing lifts the Peugeot beyond the riff-raff but undercuts the Germans - especially when you take equipment into account. And you end up with a car roomier than an Audi, BMW or Mercedes, more comfortable on bumpy roads, right on the pace for speed and quietness, and more enjoyable to drive thanks to that terrific suspension. Don't bother with the optional electronic suspension pack, by the way, unless you're a very sporty driver.

In my view, the 406 V6 is a rock-solid rival for the iconographic Germans. Volkswagen's Passat, effectively an Audi A4 with more space and a lower price, has already bridged the quality gap and upset the established order. Now Peugeot's 406 V6 makes badge snobbery seem more pointless than ever. PEUGEOT 406 V6

Prices: pounds 20,000 (406 GLX V6) and pounds 23,000 (406 V6).

Engine: 2,946cc, V6, 24 valves, 194bhp at 5,500rpm; five-speed gearbox, front-wheel drive.

Performance: top speed, 143mph;

0-60 in 7.3sec.

Fuel consumption: 21-26mpg.