Peugeot today unveiled its new 308, a key vehicle in its lineup that competes with lower-medium segment powerhouses such as the Volkswagen Golf, Ford Focus and Opel Astra.

The 308 will replace the 307 in Peugeot's lineup when it goes on sale in late September. The 307 was Peugeot's top-selling vehicle last year with 306,704 units – but that was down 18.4 percent from sales in 2005. It ranked fourth in the lower-medium segment last year, behind the Golf, Astra and Focus.

Peugeot aims to sell 350,000 units of the 308, a company spokesperson said. The highest annual sale for the 307 was 350,000 units.

The new model will cost the same as the 307, which starts at about 18,000 euros in France.

The 308 is set to be the first vehicle to use Peugeot's diesel hybrid powertrain. That version is expected to be launched later in 2008.

The IAA in Frankfurt in early September will be the first public showing of the 308. At launch, the car will be available in three-door and five-door variations. But other body styles, including a station wagon, convertible and compact minivan, are expected to follow over the next couple of years. The Peugeot 308 shares a platform with the Citroen C4.

Peugeot said the 308 will be offered with three gasoline engine choices and two diesel engine choices – all with four cylinders. The gasoline engines range from a 1.4-liter unit rated at 95 hp to a 1.6-liter unit rated at 150 hp. Diesel choices are either a 1.6-liter or 2.0-liter unit. Horsepower ratings range from 90 to 136, depending on transmission choice.

The styling of the 308 gives the car a low drag coefficient of 0.29, Peugeot said. It said the car, equipped with a 90-hp diesel engine, would emit only 120 grams of CO2 per kilometer, meeting a new standard set by the European Commission for 2012.

Options on the 308 will include rear door side impact airbags, lane departure warning system and active bi-xenon headlamps.

The 308 is slightly longer and wider than its predecessor, but also slightly lower. The wheelbase is unchanged from the 307.

Sylviane de Saint-Seine contributed to this report

You may e-mail Dale Jewett at djewett@crain.com