IF YOU’RE a Peugeot designer it’s been a tough few years. The 306, the 407 and the 206 were all decent enough cars in their own way - but they didn’t exactly set your pulse racing did they?

We now know that Peugeot’s stylists were casting envious glances in the direction of the sexy-looking Audi TT.

Why? Because the stunning new RCZ coupe could easily be the Audi’s younger brother.

The RCZ certainly looks the part with its signature “double bubble” roof - a panoramic rear window that sweeps up over back seat passengers - flanked by silver roof pillars and sitting above swollen rear wheel arches.

Even the controversial Peugeot gaping grille looks good. The RCZ’s plunging bonnet, bolder lion badge and cat’s eye headlamps help avoid that “I’ve just swallowed an enormous frisbee” look.

Inside, it’s clear the RCZ owes much to the 308 hatchback which donated its chassis to the coupe. Much of the interior cabin has been lifted across unchanged, too.

Ten years ago that would have been a disaster but Peugeot has put a lot of effort into improving the quality of its interiors in the last few years.

The plastics feel reassuringly expensive, the instruments are subtle and classy and the stalks operate with a smooth well-damped feel. An unusual looking rounded analogue clock is unique to the RCZ. It replaces the central air vent found in the 308.

A button just behind the handbrake operates a rear spoiler which glides into place via a couple of electric motors - a neat piece of visual theatre and the sort of thing you’d hope to find on a sporty coupe like the RCZ.

Only the electrically operated front seats prove annoying. Strangely, they don’t slide forward automatically when you tip the seat back forwards to allow a passenger into the back.

But, as there’s relatively so little legroom in the back, I suspect this won’t be a major concern for most RCZ owners.

My son enjoyed riding in the the RCZ - he could look out of the glass roof at the trees - but then he is only five years old. There so little room you’d have to really dislike an adult to give them a lift. Most of the time the rear buckets would be used as a particularly deep parcel shelf.

The paucity of legroom is even more of a surprise when you pop the boot - for a small coupe it’s absolutely massive.

In fact, there’s more room in the RCZ’s trunk than there is in the much larger 407 coupe. It’s also far more generous than the shoebox you’ll find in a TT.

Speaking of generosity there’s plenty of standard kit, too. Even entry-level RCZs have dual zone air conditioning, sports seats, an MP3 CD/radio, a USB socket for your iPod, alloy wheels and parking sensors. The GT adds leather upholstery, those electric front seats with heaters, automatic lights and windscreen wipers and larger wheels.

Only the CD/radio caused me any problems - try as I might I couldn’t figure out a way to turn it completely off.

I’d press the button and it would go quiet only to spring back to life whenever a radio traffic bulletin was broadcast.

In my defence, I was hindered because I didn’t have the owner’s manual, but I always think a mark of a really intuitive design is an ability to master the basics without recourse to the instructions.

Of course it’s no good just looking the part - the RCZ needs to out-perform its 308 donor car by some margin.

No worries, then. The RCZ responds keenly to steering inputs, glides comfortably over our poor roads and grips with real tenacity on challenging B-roads. The power steering is lighter than a TT but the overall performance comes very close.

Although the RCZ can be had with a diesel this is one car that demands petrol power - the smoothness, responsible and exhaust note more than compensate for the increase in fuel consumption.

Peugeot’s THP turbocharged 1.6 was co-developed with BMW to offer high performance and decent economy. The partners chose a 1.6-litre configuration as the ideal size for both aims - big enough (with a turbo) to offer giant-killing acceleration but small enough to eek out the most from a gallon of petrol.

The 200 bhp GT model scorches to 62 mph in 7.5 seconds and powers on to a top speed of 146 mph (where legal, which is almost nowhere in Europe these days). I suspect the excellent fuel consumption will be of more interest to UK drivers.

And despite its relative youth, it’s thousands cheaper than an equivalent Audi TT which is starting to suffer an over-familiarity hangover these days.

A base 1.6-litre RCZ costs £20,240 before any discounts, whereas the cheapest TT is a cool £6,000 more expensive. The French car gives away a not inconsiderable 55 bhp to the German, but hits back with lower running costs and better exhaust emissions. Just to rub salt into the German car’s wounds, the RCZ comes with parking radar as standard - a feature that costs an additional £300 on the TT. The Peugeot has a bigger boot, too.

And with nothing else available to challenge it, no wonder Peugeot bosses are bullish about the RCZ’s chances of success.

It’s amazing to think the RCZ started life as a motor show concept car. It wasn’t until potential-buyers began petitioning the company to put the car into production that it got the go-ahead. Seen “in the metal” it would seem like a no-brainer to give the car the green light.

A cracking long overdue return to form then, the RCZ has the looks, the performance and the price to give the Audi TT nightmares.

SPEC CHECK: Engine: 1.6-litre 16-valve turbo Max power: 200 bhp @ 5,500 rpm Max torque: 180 lb/ft @ 4,000 rpm Top speed: 147 mph 0-62 mph: 7.5 seconds Fuel consumption: 40.9 mpg combined Equipment: Electric windows, electric sports seats, leather upholstery, flat bottom sports steering wheel with remote controls for audio and cruise control, automatic lights and wipers, alloy wheels, CD player with satellite navigation.