“Small — as in the
  Chevrolet Matiz and
  the Peugeot 107 —
  is now the new Big”

DUE TO PERSONAL FINANCIAL CONSTRAINTS, higher taxation, fuel prices, congested roads and limited parking, the UK's new car sales figures for 2005 show a general downsizing in vehicle choice both in the retail and in the company car sectors.

The small car sector in the UK now accounts for more than one in three new cars sold. This year there have been major additions to the small or city car sector, and most volume manufacturers now offer a smaller car such as Chevrolet's new Matiz and Peugeot's 107.

Chevrolet is GM's 'budget' car brand positioned below Vauxhall, Saab and Cadillac. You may remember that Chevrolet is the badge that now adorns the Korean-built Daewoo brand.

The Peugeot 107 is one of three cars sharing a common platform jointly developed and produced by Peugeot, Citroen and Toyota and manufactured in the Czech Republic. Peugeot also has the older 206 and new 1007 ranges available to customers in the small car sector.

Priced from just £6,095 to £7,695 the 'credit card purchase' Matiz range has three petrol-engined models — all five-door small hatchbacks. The best buy is the middle of the range four-cylinder Matiz 1.0 SE, priced at £6,595. An automatic transmission option for the three-cylinder Matiz variant will be available at the end of the year, and will add £900 to the cheapest model in the range.

The Peugeot 107 Urban range basically consists of two models, both with three-cylinder petrol engines. A three-door and a five-door, priced at £6,995 and £7,495 respectively. The 107 has the option of an automatic transmission for an extra £500 and in this sector some customers will want this. Much-needed air conditioning costs £400 extra for the Matiz SE and £500 for the 107 Urban.

They go head-to-head with the previous European Car of the Year winner, the Fiat Panda, and also the flimsy Kia Picanto, the under-rated Daihatsu Sirion and now, of course, the joint-project triumvirate of the three- and five-door Peugeot 107, Citroen C1 and Toyota Aygo. They appear to be similarly priced but you do need to check individual specifications, warranty and service packages to see which is the best buy for you and which model offers the most convenient dealer option. If you are prepared to pay more, the Mini, Vauxhall Corsa and new VW Polo are all similar in size.

The new five-door Matiz is a vastly improved car over the previous Daewoo branded models. It is stronger, safer, better equipped, better looking and with potentially better residual values.

It is roomier than the Peugeot 107 and significantly cheaper but is not as economical with fuel. It has an insurance group rating of 2E — low, but still one group higher than the 107 Urban.

The Matiz SE is a well loaded package whose specification includes dual front airbags, five three-point seat belts, 60/40 spilt fold rear seats, power steering, clock, radio/CD player with four speakers, roof spoiler, electric front windows, remote central door locking and — best of all — a three-year warranty, three years' free servicing and three years' AA Total Recovery. The five doors allow easy access to the rear for passengers, whilst the fold-down rear seats and tailgate allow for functional load and passenger carrying with between 170 and 845 litres of space.

On the down side the quality of the interior is not brilliant and, although adequate for two, it is quite narrow for three child passengers in the rear. It also rolls quite a lot during cornering and it is not the sexiest thing on four wheels. However, as urban transport it is good value for money.

The 1.0-litre, four-cylinder, 62bhp petrol engine is a very willing performer and an average consumption of 42.8mpg should be achievable. A five-speed gearbox is standard and the top speed is a reasonable 94mph.

This car might be thought of as chic and appeal to young first time buyers as it's a Chevrolet, but with its good warranty and service package it represents real value for money and I see the Matiz appealing to older buyers canny enough to know a 'good deal' when they see it.

By contrast, the Peugeot 107 will definitely appeal to younger buyers. It looks stylish, the interior is trendy with similar trim and equipment ideas copied from the funky Smart ForFour and the Mini. For my money this car has more street cred for both youngsters and older female owners although the three-door version is really too small for four people — even for a city car. Access to the very small rear seats is difficult and the boot minute. At just £500 extra, the five-door model
is a much better option.

My test car was the three-door Urban with the 2-Tronic semi-auto transmission, which is not pleasant to use, plus the car had air conditioning and metallic paint so the price becomes £7,495. If you go for the same specification in the much more practical five-door layout, then the price rises to £7,995 — £1,000 more than the Matiz if you take off the cost of the auto transmission option.

So chic good looks and a much more jazzy interior will cost you more, even if the interior space is less. Horses for courses, really — it depends upon individual appeal and how you are willing to compromise.

The 107 has a much more modern three-cylinder petrol engine producing 68bhp, with a top speed of 100mph. The fuel consumption for a manual transmission model will be 61.4mpg and I gather 80mpg is achievable. However, the automatic transmission on my test car affected the fuel economy and 36mpg was all I could get. Whilst driving into a strong headwind on a motorway, the gearbox could not even hold top gear with just with me in the car — let alone what it would do with passengers or luggage on board. The engine is a nippy, responsive performer with a nice throaty sound so perhaps you should opt for the manual transmission model.

I know it costs more but the overall interior quality, the exterior styling and the lively, more modern engine with better handling and lower insurance rating gives the Peugeot 107 the edge. Just. — David Miles

Peugeot 107 Urban 3-door | £6,995 Maximum speed: 100mph | 0-62mph: 14.2 seconds Test MPG: 61.4mpg | Power: 68bhp | Torque: 70lb ft Chevrolet Matiz 1.0 SE 5-door | £6,595 Maximum speed: 94mph | 0-62mph: 12.9 seconds Test MPG: 42.8mpg | Power: 62bhp | Torque: 64lb ft