The performance hatch sector has evolved to the point where family cars are now putting nearly 400bhp to the road through clever and complex four-wheel-drive systems. However, this continuous progress means cars such as the new Volkswagen Golf GTI are more relevant than ever. This Mk7.5 GTI still offers plenty of performance, but in a usable and more affordable package compared with fire-breathing models such as the Mercedes-AMG A 45.

The latest incarnation is a mild facelift rather than a radical rethink of the recipe, but it faces a serious challenge from the Peugeot 308 GTi. In such a tight and competitive sector, this will be a tough test for the VW.

Options: Discover Navigation Pro (£1,325), lane assist plus (£1,225), rear-view camera (£265), 19-inch ‘Santiago’ alloy wheels (£990)Pearlescent paint (£675), panoramic roof (£500), Peugeot Connect SOS and Assistance (£240)

Volkswagen Golf GTI

Volkswagen’s history of high-performance family cars stretches back decades, and the revised GTI is the brand’s most accomplished model so far to bear the iconic boot badge. It sits above the standard TSI and TDI hatches, and beneath the range-topping Golf R. That car is four-wheel drive only, so the front-wheel-drive GTI represents an appealing middle ground for those looking for affordable pace and practicality.

Based on the Golf hatch, the GTI is available with three or five doors, but no estate is offered. Following a mid-life facelift earlier this year, the familiar 2.0-litre petrol turbo now comes with 227bhp as standard. A GTI Performance model is also available, pushing power to 242bhp.

Our test car was fitted with VW’s DSG dual-clutch automatic gearbox – a six-speed unit here, but a seven-speeder on the GTI Performance. While the Peugeot is manual only, offering a good level of engagement, the Golf’s twin-clutch box features launch control for lightning-fast starts and crisp shifts. A sweet six-speed manual is also available, saving £1,415 and matching the involvement offered by the Peugeot.

The Golf’s throttle response is excellent, with little turbo lag and plenty of torque in the mid-range. In fact, 350Nm is available from as low as 1,500rpm, so the VW was strong in our in-gear tests.

However, the Peugeot’s superior power meant it was quicker both off the line and through the gears. The Golf sprinted from 0-60mph in 6.4 seconds, and completed its fourth-gear 30-50mph dash in 4.4 seconds, compared with 6.2 and 3.5 seconds respectively for the 308 GTi. The VW covered the 30-50mph sprint in third in 2.8 seconds, which was identical to the figure we recorded in the Peugeot.

Our Golf’s optional 19-inch alloys kick up quite a bit of tyre roar, and previous experience on the standard 18-inch wheels suggest they’d be much quieter over broken British roads. They offer a more comfortable ride as well, and while the VW is still more composed than the Peugeot, we’d opt for the smaller rims to get the more composed feel.

The smaller wheels require little sacrifice when it comes to handling, too. The Golf’s precise steering is nicely geared and weighted, while the MQB platform helps here, serving up plenty of grip in corners while offering great compliance.

Want even more versatility? The £830 adaptive dampers sharpen up the chassis in Sport, cutting roll and improving response on turn-in. Meanwhile, in Comfort the GTI offers a relatively relaxing ride given its ability on a twisting back road.

Peugeot 308 GTi

The 308 is based on Peugeot’s EMP2 scalable platform. This is the answer to Volkswagen’s MQB architecture that underpins the Golf GTI, and it’s a decent base from which to develop a hot hatch. MacPherson struts at the front match the Golf’s, but the torsion beam rear axle isn’t as sophisticated as the VW’s multi-link set-up. However, additional tweaks from Peugeot Sport help ensure this GTi 270 is a proper rival to the Volkswagen.

In fact, it offers more power than even the GTI Performance, with Peugeot Sport’s engineers extracting 268bhp from the 308 GTi’s smaller 1.6-litre four-cylinder turbo. The unit is slightly down on torque, though, with only 330Nm to play with, delivered higher up, at 1,900rpm. This reflects the engine’s peakier character. The smaller capacity means the motor has to be revved harder to extract the performance, but it’s an eager engine that hurls the Peugeot along when the turbo is spinning. This was reflected in the 308 GTi’s quicker 0-60mph time of 6.2 seconds, even though it uses a six-speed manual rather than the faster DSG in the VW.

Unlike in the Golf there’s no dual-clutch auto option, so you’ll have to make do with the manual. Despite a slightly long throw, the gearbox offers more engagement than the VW’s admittedly quick DSG. However, it’s not quite as effective in raw performance terms, and neither is it as sweet as the Golf’s standard-fit six-speed manual.

The 308’s slightly lower torque output doesn’t seem to have a detrimental effect on in-gear performance; the 159kg lighter kerbweight gives the car an advantage. For us, it pulled strongly even in fifth gear, completing the 50-70mph dash in 4.4 seconds. The Golf took more than a second longer, completing the same test in 5.7 seconds.

As part of the Peugeot Sport tweaks, the 308 GTi also gets big Alcon brakes. These offer good feel, even if they give no more stopping power than the VW’s set-up. Where the 308 loses out to the Golf is in ride and handling. The Peugeot’s dampers are fairly firm, so body control is good in quick corners, but the car doesn’t have the same split-personality feel as the Golf, and it’s not as compliant during normal driving or on long journeys. It’s not uncomfortable, but doesn’t offer the finesse of the VW’s damping set-up.

The driving position isn’t as natural, either. Peugeot’s i-Cockpit layout features a narrow-diameter steering wheel, which means the 308 turns in quickly. There’s plenty of grip on offer to match the speed of the steering, but this gives a more frenetic feel more of the time.

Testers’ notes:First place: Volkswagen Golf GTI

The Golf GTI is a brilliant hot hatch. Rivals might offer more power, but the VW is still fast enough and simply brilliant to drive. Its combination of quality, usability, practicality and economy makes it one of the finest all-rounders on sale today. We’d spend the extra for the GTI Performance, too. 

Second place: Peugeot 308 GTi

The 308 GTi puts up a good fight thanks to its impressive performance, yet the VW’s superior handling, better tech and top-notch build quality give it the edge here. The Peugeot might be faster, but it isn’t as fun or as sharp to drive. Also, while the car is practical, its infotainment is frustrating.

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