For: Practicality, style (Volvo), versatility (Peugeot), easy-driving pleasure (both).

Against: Lacking in ergonomic finesse and a trifle tight for passenger space, dated interior (Peugeot); offers a lot but would shine brighter if a little cheaper (Volvo).

Scores: Volvo V60 D3 4/5; Peugeot 308 SW HDi 2.5/5.

So much about the Volvo and Peugeot medium models on test this week screams 'niche', and not just because they're out of Europe.

They're also wagons. With diesel engines, and automated transmissions, realistically positioning, in terms of buyer perception if not outright price, in what the industry calls the 'near-premium' sector.

Which adds up, effectively, to these being cars you're very unlikely to spot on a daily basis. That's a shame, because personally I'd be easily talked into finding a place for a thrifty, well-kitted and stylish load-all in my lifestyle.

Sure, being on a rural property, the added ingredient of four-wheel-drive – which the Volvo offers as an option, but Peugeot not at all – would be welcomed as well. But, as is, each of these cars definitely struck a chord.

Of course, you're bound to ask which is better? It's a bit unfair to make a direct comparison; being in different price ranges might not necessarily mean each ultimately appeals to a different buyer, but it does suggest ultimately owners might well derive from different earning ranges.

Still, if it all comes down to bums-on-seats enjoyment, then the Sino-Swede – if that's what we should now call Volvo now that it's owned by China's Geely – would be more likely to secure my interest.

It says a lot about the 'rightness' of Volvo's V60 - especially in terms of its safety, comfort and design - that this five-seater would win. But, yes, it all comes at a price. If value is purely perceived in dollar terms, the 308 SW makes more sense, hands down.

Even in 'entry' D3 format as tested, the V60 still comes with a $69,990 appearance fee, whereas a 309 Active is nominally a $45,990 admission, though the example on test was in a higher bracket, having diverted from regular NZ-market specification with the enhancements of leather and heated electric seating ($4000), sat nav ($3000), xenon directional lights and 18-inch alloys, each for $1500.

Without these add-ons, it still presents the extravagance of a panoramic fixed glass sunroof, a fixture unique to this brand, though ironically one that mightn't be appreciated on a sunny summer's day, for the cabin in see-through mode becomes a real heat trap that the air con frankly struggles to overcome.

Actually, even with the inner roof lining in place, the a/c performance still isn't good.

Back when the 308 was fresh, the cabin design did a lot to move Peugeot's game forward in terms of design and finish. Four years on, it's not so smart, and it's a shame the facelift effected this model is only that: A new nose. Behind the wheel, there's a lot to remind that 308 emerged when Peugeot retained a penchant for cheaper plastics and fiddly minor controls.

Comparison with the Volvo is sobering, and essentially it's nothing to do with cost. Simply, the Swedish approach is cleaner, easier to comprehend and simply more stylish, with an elegant simplicity. It doesn't abdicate from the requisite level of idiosyncrasy that you'd expect from a Euro, but neither does it serve to flummox. They've also provided a more comfortable and natural driving position, too; there's a sense, with the 308, if sitting too high, and not quite far enough from the wheel.

The SW's practicality is a big selling point. The fact that it can carry seven makes it one of a kind, as no other direct rival offers so many seats in a vehicle of this size and type. Not that it has to be restricted to bus mode, as all the seats fold down or can be removed completely to create a usefully large load space.

The process isn't as clever as some of the fold-flat systems that are used in MPVs, but the middle seats all slide forward independently, and thanks to clever floor mountings you can have either two or three chairs in the second row. A confession: Knowing that, for the most time we'd only run with two aboard, There seemed no point running with a third seat row, so that was left at the dealership.

Actually, you'd have to wonder what kind of contortions would be required to effect filling all the seats, as it's not a hugely roomy car and the third row is small. Though it basically takes up similar roadspace, the Volvo delivers more legroom front and rear. They're similar for load space, with the Swede giving a wider but shallower boot. For ultimate detailing, though, the Volvo covers more bases.

Peugeot's decision to base the 308 on an updated version of the 307 platform seems brave, but it still gives the impression it'll make a trustworthy travel companion. The Volvo, though, gels more completely because while it gives away ground for steering feel, it makes up with a more compliant ride – a surprise, perhaps, given that the French have historically excelled in this area – that ultimately makes it a more convivial accomplice for long-distance driving. But it's down to semantics; both are game in corners, with good resistance to understeer and generally neutral handling.

Their other area of expertise, of course, is in the production of small capacity diesels. In isolation the 2.0-litre HDi four-cylinder works very effectively; delivering all its muscularity and economy in a refined, linear and mature way and associating well with the six-speed automatic.

It's all good … until you meet the Volvo. The D3 drivetrain is their newest, and reminds how fast the pace of developmental change is occurring in dieseldom. Funnily, it's really nothing to do with outright economy – actually the plucky Peugeot shone here, with a 6.7 litres' per 100km average trouncing the Volvo by 0.1 – or power: the French four-cylinder and Swedish five-pot both create 120kW.

No, the difference is felt in sheer muscularity; torque-wise, the Volvo is 60Nm up on the 340Nm Pug and seems to deliver over a broader spread, and also in refinement. It seems somehow wrong that the engine with an uneven cylinder count should be smoother and less vocal, but there you have it. It is. Consistently, too.

I've probably left the impression that the V60 relies on perception of badge prestige to get through at this money, but that's not entirely true. There's also a strong safety story (but no surprise there) and technology edge, with City Safety - the clever system that can automatically prevent a nose-to-tail collision at up to 15kmh – as standard fare.

It's a pity Volvo pricing couldn't realign just a fraction further toward the mainstream; as good as the V60 is, it's simply going to struggle to win favourable comparison with other high-end Euros. Pitching against a Mondeo (with which it shares so much) would be a happier story.

It is, nonetheless, a more satisfying car than the 308, which for all its talents just isn't quite as spicy as it ought to be.