There’s no doubt that Peugeot is on a roll. Not only have its new SUVs has been successful – notably the 3008 which was crowned 2017 European Car of the Year – but it’s also just announced that from 2019 every new model will be available with either a hybrid or electric powertrain.

Now the French lion-brand is turning its attention to the weak spot in its range with a replacement for the dull but worthy 508 saloon and SW (estate).

The stunning all-new Peugeot 508 (the SW version will follow in 2019) couldn’t be more different to the outgoing model.

Priced from £25,000 to £37,400 and competing with everything from the Skoda Superb and Volkswagen Passat to the BMW 3 Series and Audi A4, the second-generation 508 is a breath of fresh air.

However, no matter how good it looks, the 508 has its work cut out because sales in the so-called D segment (large family cars) have taken a hit thanks to the craze for SUVs.

However, if ever there was a car to attract buyers back, the 508 could well be it. Just as Peugeot’s designers sprinkled magic dust over the old 3008 to create a cutting-edge, award-wining SUV, the old 508 saloon has been replaced by a stunning fastback.

With its bold new five-door “coupé” design it’s handsome from every angle and features elegant frameless doors, while inside it boasts Peugeot’s unique state-of-the-art i-Cockpit. And just like its SUV siblings, it also features ‘claw effect’ LED lights at the rear.

The sleek new 508 is 60mm lower and 80mm shorter than the outgoing model, while gaining 20mm in width. And thanks to its distinctive chequerboard grille design, lower bonnet and aggressive stance, it looks like nothing else in its class.

There’s plenty of space up front, but it feels a little cosier in the rear thanks to that swooping roofline. In fact, taller back-seat passengers may find their head brushing the roof, especially if the panoramic sunroof is optioned.

That said, if you lift the huge hatch, there’s a healthy 487 litres of space in the fairly shallow, but deep boot, extending to 1,537 with the rear seats flipped.

There are five engines to choose from – three diesels and two petrols, while a plug-in hybrid model is due in 2019.

The diesels kick off with a 1.5-litre BlueHDi developing 130PS, though the two 2.0-litre engines offer more power (160PS and 180PS). If you prefer petrol, then the 1.6-litre unit comes with either 180PS or 225PS.

An eight-speed automatic gearbox is standard on all cars in the range except for the entry level 1.5-litre BlueHDi 130 which is available with a six-speed manual.

The fastest 508 to reach 62mph from standstill is the 1.6-litre PureTech 225 petrol with a time of 7.3 seconds (top speed 155mph), while the best fuel economy comes from the 1.5.litre BlueHDi 130 diesel with an impressive 76.3mpg (automatic version). This engine also offers the lowest CO2 emissions at just 98g/km.

There are six trim levels at launch – Active, Allure, GT Line, GT and limited-run First Edition. Autonomous Emergency Braking (AEB) is standard across the range.Active gets an 8.0-inch touchscreen with sat nav, but Allure and above boast a 10-inch screen and heated seats.

Go for the trim expected to be the most popular (GT Line) and you get LED headlights, ambient interior lighting, keyless entry and Go, plus a smartphone charging plate and dark tinted rear windows.

You sit low in the cabin and not only is the dashboard, and interior generally, attractively designed with a premium feel, it’s comfortable too. Visibility is good, though the rear hatch window is on the small side thanks to the fastback design.

If you’re not familiar with the 3008 or 5008 SUVs, then Peugeot’s unique digital i-Cockpit layout in the 508 might take a bit of getting used to.

As you can see from the interior picture, i-Cockpit stacks 12.3-inch digital dials above a small steering wheel, complemented by a large touchscreen in the centre console.

I-Cockpit isn’t just eye candy either – it’s a stylish, futuristic infotainment system boasting fluid, colourful graphics in a cabin that’s cool and individual.

A lot of thought has gone into the system too. For instance, the touchscreen can be navigated completely by touch, but Peugeot’s also realised that fumbling around on the move isn’t always ideal, so there’s also a bank of shortcut buttons directly below, giving direct access to the sat nav and phone, for instance.

And a special mention for the optional Night Vision technology which makes it easier to spot pedestrians or animals in the road at night via an infra-red camera at the front of the car.

I tested the two 1.6-litre petrol turbo cars (180 and 225), plus the 1.5-litre diesel (130) with manual gearbox.

The 1.6-litre 180 PureTech petrol is expected to be the biggest seller, though diesels are likely to be the most popular overall because most 508s are likely to be bought by fleets and will be plying the motorways.

Both petrol-engined cars performed well. If anything the 225 is a little OTT and the 180 is more than enough power for most with a 0-62mph time of 7.9 seconds and a top speed of 143mph. With a smooth, refined delivery, it feels faster than it is, especially in Sport mode where it sounds meatier too.

The 8-speed automatic gearbox shifts smoothly enough and works especially well in manual mode using the steering-wheel mounted paddles.

However, the revelation came when I tried the 1.5-litre BlueHDi 130 diesel with the slick 6-speed manual box. For more sporty drivers, this may well be the one to go for because you feel instantly more connected.

It’s an admirably civilised diesel with plenty of pulling power and it seems faster than its official 0-62mph time of 9.7 seconds. And of course, a potential 74.3mpg is nothing short of phenomenal.

No matter which engine you choose, the new 508 offers a refined cabin, and while the ride isn’t quite as sophisticated as I’d hoped when it’s driven in a more spirited fashion, it’s perfectly acceptable and cruises along nicely. In fact, if you push it into corners, there’s negligible body lean and it seems agile enough, while the steering is light and direct.

Finally, Peugeot has some words of comfort for those of us that can remember when big French saloons generally meant higher than usual depreciation. Similar to the 3008 before it, Peugeot is claiming class-leading residual values for the 508, which means it should be worth more than its rivals after three years which is good for fleets, PCP deals and private cash buyers.

Verdict: The handsome all-new Peugeot 508 is a class act and perfectly illustrates that there are sleek, safe, spacious and economical alternatives to the ubiquitous SUVs for families and executives alike.

Review in association with www.automotiveblog.co.uk