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Sales of GTi hatchback models have been decimated because of rocketing insurance premiums. It’s all testimony to a massive increase in car theft and joyriding (and the inevitable ensuing accidents), to which the bearers of GTi and similar badges have been particularly susceptible.

In turn, this has opened up a new sales pitch — slightly toned-down ‘hot’ hatches, which represent a growth area for manufacturers, and an antidote to the depressing sales trend. At least two very evenly matched juniors, the Peugeot 106 XSi and the Renault Clio RSi, have proved not to be so inferior to their bigger brothers. Peugeot launched the 106 some two years ago to fill a gap below the 205 range and the XSi derivative was greeted with almost as much praise as the 205 GTi 1.6 had been over 10 years earlier. Renault, meanwhile, has added to an existing model range to achieve the same effect, by introducing an eight-valve version of the relatively expensive, and slow-selling, Clio 16v.

Engine size apart, these two cars are remarkably similar. Indeed, when viewed side by side (both in electric blue metallic) from a lofty perch one storey up, it was difficult to tell them apart. At closer quarters you appreciate that the Peugeot is slighter, and, arguably, looks the prettier of the two, though there were those who expressed a preference for the Clio’s more aggressively sculpted wheelarches and colour-coded bumpers and mirrors. It looks as though it should be more expensive, and it has a greater air of solidity. Renault has done rather more than its French counterpart to clean up its construction, with better build quality and the use of superior materials. The Peugeot is adorned with cheaplooking, grey plastic bumpers, mirrors and rubbing strips. Below the skin, the competition is altogether fiercer. The Peugeot may well give away some 400cc to the Renault’s 1.8-litre, four-cylinder heart, but it still puts out a solid 95bhp, only 13 shy of the Clio. Despite this mild deficiency, its lighter weight endows it with similar performance to the RSi 9.6sec to 60mph and 118mph top speed (9.0sec and 121mph respectively for the Clio).

For such a small engine, the Pug’s catalysed and injected four-pot is almost as strong and even more willing than its larger adversary. Perky responsiveness has always been a trademark of Peugeot’s sportier engines (though their low-speed running at crawling pace leaves a little to be desired), and the XSi continues this tradition. The unit is linked to the customarily fragile, but precise, five-speed ‘box, and its ability to pull from low down the rev range urges the driver really to press-on around any twisty road sections that he encounters. In fact, despite being badged to convince insurance companies otherwise, both of these cars appear to have been conceived specifically for this type of driving. Their short length, stiff chassis and firm, sporty suspension means that their agility is exceptional, yet both have a relatively long wheelbase which cuts potential nervousness down to a minimum, so one can throw them around B-roads safely with almost wild abandon.

They turn-in neatly and can be drifted on the throttle without too much effort. As with any short vehicle, one does need to be quick to catch a the rear end if you induce it to break away by the artificial means of lifting the throttle in mid-corner. Such behaviour should, of course, be reserved for the racetrack. The Renault has the greater amount of understeer, and is the more ponderous because of its fractionally larger dimensions and apparently softer springing. The Peugeot surges further ahead on account of its slicker gear-shift and immaculately precise steering at speed though the Renault’s nicely weighted power system wins hands down in the parking stakes. Otherwise, both feel very similar to drive quickly.

For front-wheel drive cars, both are blessed with good traction, though eager use of the throttle will cause squeals of protest from the Clio’s Michelins. This is testament more to the outstanding balance of the Peugeot’s chassis than a criticism of the RSi’s. Stopping these feisty little hatchbacks also inspires confidence. ABS was fitted as an option to both test cars, and each has a firm brake pedal which combines little travel with plenty of feel. Once again, the Peugeot has a slight edge, and overall the 106 gets the nod if you appreciate high levels of feedback and pure responses. You can have a truly intimate relationship with the Peugeot, though any objective referee would be hard-pushed to make a straight choice between that and the RSi as a means of cross-country conveyance.

It’s easier to adjudicate when it comes to motorway cruising. Here, the Renault proves to be significantly superior. In the Peugeot, the traditionally straightforward, hour and a half trip from London to Dover proved unusually stressful. The subsequent break chez P&O was most welcome but, at 75 minutes, rather too short. Disembarking to tackle further, extensive motorway mileage, even on smoother French autoroutes was no enticement to get off. . . particularly as our destination was the south-east coast, and speed was of the essence. At anything over 80mph the 106 quickly becomes loud and tiring. There may be not be much to choose between them in terms of top-end performance, but the Renault is so much more relaxing to drive at higher speeds. Peugeot provides more sophistication at cruising speeds, and better use of cabin materials gives interior a feel of comparative quality.

It has better sound-deadening, which keeps tyre roar, engine and wind noise to a minimum. It also feels altogether sturdier than the Peugeot.

The XSi’s ride is by no means harsh it absorbs ridges and bumps without undue fuss but Peugeot has yet to exorcise the ‘porpoising’ ghost that made the early generation 205s a trifle spooky on undulating roads. It isn’t too irksome, but the more compliant Clio is gentler on its passengers, having a ride quality that belies its size and purpose.

At the wheel, the Clio again scores higher marks. Its interior decor welcomes its occupants with greater style. Renault having used cabin materials more effectively. Although, like the Peugeot, it is predominantly plastic, the mouldings have a feel of greater solidity and quality. The Peugeot’s instrumentation is undoubtedly clearer and the driving position proved more comfortable for my slender five foot eight frame !if you ignore the cramped footwell), but the Renault’s front seats don’t merely look more inviting: their sporty profile offers levels of support that the Peugeot cannot match.

An electric sunroof is offered as standard only on the Renault, but otherwise both cars feature a similar level of equipment remote central locking/engine immobiliser system, electric front windows and door mirrors and a four-speaker stereo/cassette system. Peugeot’s is ‘designed’ and integrated into the dash for security, while the Renault’s (which sounds more powerful) can be hidden under a security ‘flap’ and has the option of six speakers and the now familiar column-stalk controls, the excellence of which is an established part of current motoring folklore.

Deciding a winner here is more down to individual taste than money.

For £10,695, the Clio is a mite faster, a trifle more opulent, feels more solid and, in terms of all-round practicality, is perhaps easier to live with than its compatriot.

Not everyone will be governed by nine-to-five common-sense, however.

Even in these days of repetitive car design, there are such things as free spirit and there are times when that will prevail. Any headaches you incur using the 106 XSi on motorways will be offset by an extra £450 in your pocket, cheaper insurance and reduced fuel bills (we managed nearly 40mpg on the autoroute, to the Renault’s 331. Then there is the sheer panache of the prettiest, nippiest, sharpest handling, most entertaining hatchback this side of a 1.9 litre 205 GTi.

In 20 years’ time, it may come to be remembered as the Mini Cooper of its generation: flawed, but what the hell? It’s fast, and fun. Whilst taking advantage of the comparative peace and quiet on the return ferry journey (coachloads of French schoolchildren do far less for paracetamol sales than relentless motorway trips in the 106), I reflected that I could live quite happily with the Peugeot, always assuming that I didn’t have to undertake too many journeys of this nature. In the real world, where flair often has to give way to cautious objectivity, such observations may, of course, swing the verdict in Renault’s direction. R R B