Citroen provided the biggest upset so far in this year's World Rally Championship when Philippe Bugalski drove a works Xsara to win the Catalunya Rally in Spain. That was by a margin of 31 seconds, almost a runaway victory in a championship where split-second timing is now needed to sort out the stage winners. It was also the first outright victory in a WRC event by what amounts to a ''second division'' entry.

While the WRC cars from the likes of Ford, Subaru, Toyota and Mitsubishi are fire-breathing four-wheel drive turbo monsters, the 295bhp Citroen was running in the F2 category for two-wheel drive non-turbo two-litre cars, although like their more powerful cousins these purpose-built machines are miles away from showroom specification.

On the twisty tarmac roads of Catalunya, the Citroen's agility and Bugalski's inspired driving overcame the far greater straight-line performance of what are usually the top teams. It was not just Bugalski alone, because he inherited the lead when his Citroen team-mate Puras retired. In fact, one Citroen or the other led the rally from start to finish. It is not lost on the company or the opposition that the next round of the championship is on the twisty tarmac roads of Corsica.

Citroen moves in and out of international motorsport. For a while it concentrated on the great desert raids like the Paris-Dakar. More recently, it has run a team in the French tarmac rally championship; so it did not go to Catalunya unprepared.

In the UK, the Saxo is its best-selling car, with VTR and VTS versions which top the current all-makes hot hatch charts. We are not likely to see a Citroen model taking the same approach again, because the Saxo and the rival Peugeot 106 are basically the same design, and they are reckoned to look too similar.

PSA, the Peugeot-Citroen parent company, has taken the hint from Wolfsburg. As far as efficient production engineering is concerned, the genius of Volkswagen is to mount cars of different makes on a common platform, but to make sure that, thanks to totally different bodywork, they seem completely unalike. Similarly, the Saxo and 106 replacements will be very clearly differentiated.

Citroen's number two model range is the Xsara. I have driven a couple of these cars recently, and particularly enjoyed the coupe, which has fine lines and a good presence on the road. The Xsara hatchback and estate, but not the coupe, will be the next recipients of the PSA group's excellent HDi common-rail direct injection diesel engine, in 90bhp form.

It was the Xantia which introduced the PSA common-rail diesel to the UK. In 110bhp specification the Xantia HDi is an impressive car, and in the autumn it will become available with the 90bhp power output as a cheaper option.

Top model in the Xantia range is still the low-volume Activa, with its computer-controlled anti-roll suspension. By PSA's latest beady-eyed bean-counting, it cannot make sense that the Xantia and the 406 compete in the same sector of the market with so little structural engineering in common. As with the Saxo and the 106, their replacements could be decidedly similar under the skin.

The XM soldiers on, a very roomy saloon and estate with, thanks to the hydro-pneumatic suspension it shares with the Xantia, excellent ride quality. At the Geneva Motor Show, Citroen displayed its very smart Lignage concept car, which was intended to show it is thinking about an XM replacement.

Lignage in English is Lineage, which is confusing in itself. This is not line-age as journalists think about it, which is payment in proportion to the number of words written, but ''lin-e-age'' in the sense of historical family succession. The Lignage will not appear as a production car in its Geneva Show form, but it is an indication of the approach the Citroen design studio is taking.

There are two new engine options in the Berlingo Multispace, about which more next month. They will broaden the appeal of a car which has very successfully made the transition from high-built van to very capacious sort-of MPV.

Citroen's full-size MPV, the Synergie, is about to gain the 110bhp HDi engine as an option. The increased use of these common-rail diesels explains why production of them is being increased from 800 per day just now to 2000 after midsummer.

Citroen is also preparing to launch the more stylish Xsara Picasso mid-sized MPV. This is the type of vehicle which is being tipped to take a far greater share of the overall European market within the next two or three years. Unlike Lignage, which is only a show name, the Xsara Picasso will be badged as just that when it appears in the UK next spring.

n Honda has produced a revised version of its luxury saloon, the 3.5-litre V6 Legend. Together with a certain amount of restyling, the latest model has acquired wider alloy wheels, xenon headlights, uprated brakes and a more sophisticated airbag system.

Suspension has been modified to provide better stability, improved ride quality and reduced road noise. Power output remains at 205bhp, allowing a 0-60mph sprint time of more than nine seconds and a test track maximum on the 140mph mark. Price is down to #31,995.

n Mitsubishi is back in the news, with the announcement of its GDI SIGMA powertrain project. This is a step forward from the already familiar GDI direct injection petrol engine, linking that technology with CVT, an automatic stop-start system at idle, hybrid petrol-electric power and a more economical turbocharger design. The new powertrain should appear in production next year.

n Machars Car Club hosts the next two rounds of the Pirie Scottish Autotest Championship on Sunday at Baldoon airfield south of Wigtown. Round three starts at 10.30am and round four is being held in the afternoon.

n Jock Hislop and Colin Ross in a Mini lead the Aero Scottish Historic Rally Championship. Robert Leech and John Young in a Triumph TR4 are second. The next event is on June 11, the first day of the RSAC Scottish Rally at Dumfries.

n A new event on the historic rally calendar is the Caledonian Discovery Rally scheduled for June 19. Starting from Morrison's Garage at Whins of Milton this 150-mile event finishes at RRS Discovery in Dundee. Details from Dan McIntosh on 01259 742332.