The Fiesta rival, labelled the best Peugeot small car since the iconic 205, has survived the whittled-down list to go up against the likes of the Ford B-Max and Renault Clio for the top award.
Judges from around the world will now vote on the eight-strong shortlist to choose the outstanding car of 2013, which is set to be announced in March at the Geneva Motor Show.
The new Peugeot 208 is the successor to the Peugeot 207 supermini but the new model weights significantly less. New technology means the 208 is 110kg lighter which helps to improve running costs.
Fitted with a new three-cylinder petrol engine in 67bhp and 81bhp variations, the new Peugeot 208 offers CO2 emissions below 100g/km for entry-level models – enough to qualify for zero road tax in the UK.
Diesel options are also available for the new 208, with road tax-free versions offered at the greener end of the range.
With a sportier silhouette and a stylish new front end, the Peugeot 208 looks sleeker and more modern than predecessors and offers higher levels of standard equipment.
This includes front electric windows, central locking and rear LED lights while Active models add 15-inch alloy wheels, front fog lights and a colour touchscreen for infotainment systems.
At the top of the range Feline models add 17-inch alloy wheels, a rear spoiler and privacy glass as well as lashings of leather inside to create a more premium feel.
On sale now at Perrys Peugeot dealerships, the new Peugeot 208 is one of eight cars that can take the most prestigious award in the industry.
Last years’ winner was the Volkswagen Up, a car that is almost identical to the Seat Mii and Skoda Citigo.