##pug607.jpg--Right##VEHICLE manufacturers are looking to cut and control costs all the time as they seek to increase profitability, so why should Peugeot think it can take on the might of BMW, Mercedes-Benz and Jaguar in the executive car sector? Vauxhall is battling gamely on with the Omega, but Ford threw in the towel a long time ago and has no intention of re-entering the battleground.

But Peugeot has decided it is worth building right-hand drive 607s for the UK and its French rival Renault will soon join in the bid to win hearts, minds and wallets in the corporate arena. No one would doubt the build quality of the 607 - although the centre console storage compartment between the front seats does not shut correctly - but in this sector of the marketplace image is all important and while the 607 looks good it displays the wrong badge.

And, while the company car driver might like the look of the car and the numbers stack up reasonably in terms of company car tax as far as both list price and carbon dioxide emissions are concerned, the shrewd fleet manager will have a heart attack after checking on residual values. With CAP Network predicting a three-year/60,000-mile residual value of 30% it means the 607 'loses' ú17,850 - a figure I suspect most fleet chiefs will find unpalatable.

The French marque has made much of the world-first pollution-busting particulate filter debuting on the 607, but in terms of CO2 it is difficult to make a good case for choosing the 2.2 HDI in automatic guise. CO2 emissions of automatics are always worse than manuals so pushing company car tax up under the forthcoming benefit-in-kind banding structure. Our test car has a CO2 figure of 193g/km compared with the manual's 180g/km - a figure obtained from Peugeot's press pack but the Vehicle Certification Agency's 'New Car Fuel Consumption and Emission Figures' booklet gives a figure of 178 g/km - a vital 2g/km difference which puts the manual version into a lower tax band - compare that to the Mercedes-Benz E220 CDI which offers 180g/km in manual form and 188g/km as an automatic, while the BMW 525d offers 179g/km as a manual but a poor 216g/km as an automatic.

Surprisingly the 607 is noisy on start-up and, although Peugeot reports no problems, it is the second 607 diesel we have had in the Fleet NewsNet office with drivers reporting a similar problem. However, the excellent soundproofing means that once on the road the 'clatter' is barely audible. Superbly supportive leather seats, heaps of interior and boot space and top-notch standard equipment do justice to the 607 as an executive sector car. Meanwhile, the electric wizardry is superb with automatic headlights and windscreen wipers reacting to the weather conditions without the driver having to take action.

While Peugeot is doing its bit to win corporate business through sharp pricing and superb specification levels, the manual is a better bet than the automatic - a fine motorway cruiser but for urban driving a manual is more my scene - from a company car tax viewpoint. But ultimately it is difficult to make a case for the 607 in the corporate arena given some of the opposition. Fleets should stick to buying Peugeot's excellent range of smaller diesel cars which are king in the company car jungle according to the sales figures.

Ashley Martin