It’s unusual that new segments emerge in the light commercial vehicle industry, but Citroen (along with its partner brands Peugeot and Toyota) is trying to elbow its way into the gap between medium vans, like the regular Dispatch, and light vans, such as the Berlingo or VW Caddy.

The Citroen Dispatch, and the Peugeot Expert and Toyota Proace, which all live on the same chassis, has arrived in latest-generation form with a new baby version that’s closer to light vans in size terms than was the case with previous models.

In Citroen’s case it’s called the XS, which joins M and XL body sizes, and, at 4.60m long, is 35cm shorter than the M and 70cm shorter than the XL, making for three very distinct vans. The vans are 1.9m high, making regular car park barriers no threat.

Peugeot Citroen’s head of light commercial vehicles Robert Handyside reckons the XS is well-positioned to capitalise on a recent witnessed trend of some drivers migrating up from Berlingo-sized vehicles into the medium van segment, and feels that there’s a market where the small price rise for a still city-friendly van that’s more durable and strong, but can cope with more payload and capacity, is one that exists to the level where it’s worth having a specific model to target it.

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The XS is £700 cheaper than the M length of vehicle, and the Citroen price list has the same six engine and gearbox options for both sizes – ranging from the 95hp 1.6 as manual or auto, to the manual 115hp, 120hp and 150hp diesels and the automatic 180hp unit. All come in X and Enterprise trim, with the top Enterprise Plus also offered on the top three engines.

The XS version of the Dispatch manages to avoid looking ungainly, as an out-of-proportion van can sometimes do.

Jumping into the cabin, there’s just about enough room for taller drivers with the seat pushed the whole way back. There’s a big improvement in cabin quality, despite some harder plastics being evident lower down in the interior, and while there has been a big step forward, it’s maybe not the most plush of cabins on the market.

Citroen is the latest manufacturer to adopt the load-through hatch – called Moduwork in this case – and it’s standard fit on all bar the entry-level model. Longer, narrow items can be pushed through a gap in the bulkhead and under the passenger seat into the passenger footwell, adding 1.16m of load area. The dual passenger seat base can also be folded up to allow more fragile items, such as a box that the user doesn’t want sliding around the load bay, to be carried.

We sampled the entry 95hp diesel and found decent levels of refinement and performance, especially around town where it’s perky enough to power an admittedly unladen van without hassle, although frequently put a proper load in the back and one of the more powerful engines may be a better bet.

Likewise, if you’re doing any significant motorway or dual-carriageway work, then any of the other engines get a welcome sixth cog that settles the engine down at a lower rpm.

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But efficiency still impresses, with the Dispatch XS recording a 51.4mpg figure for this 95hp diesel, while the BlueHDI 115 stop/start manual records an official 55.4mpg, which Citroen claims is unbeaten in the class.

Clever technology available across the range includes the hands-free sliding side doors that open with a wave of the foot under the corner of the bumper, and head-up display – both firsts for the LCV sector – while a range of safety kit, including autonomous emergency braking and blind spot monitoring, are also on offer.

The new Dispatch is a big step forward over its predecessor in everything from refinement and looks to cabin quality and equipment, and this XS version opens up a new possibility for operators that were having to choose between a van slightly too big or one slightly too small.

And anything that helps operators into the right van for their needs should be welcomed – it will be interesting to see if anybody else looks to insert a new niche in the middle of their product portfolio.

Citroen Dispatch 1.6 BlueHDI 95 XS Enterprise
Price (ex VAT) £18,845
Price range (ex VAT £17,495-£24,145
Insurance 31E
Warranty 3yrs/100,000mls
Service intervals 25,000miles
Load length 2162mm
Load width (min/max) 1258mm/1628mm
Load bay height 1397mm
Gross payload 1100kg
Load volume 5.1m3
Engine size/power 1560cc/95hp
On sale September 2016
Combined fuel economy 51.4mpg
CO2 144g/km