The 205, which was launched in 1983, became the definite small Euro hatchback over a 15 year production run that saw over 5 million examples sold. It is widely held that Peugeot management avoided the tricky business of replacing the 205 by simply avoiding the issue. Instead, it launched the tiny 106 City car in 1991 and the bigger 306 in 1993, which was aimed at the lucrative upscale hatchback market dominated by the VW Golf. However, the trusty 205 remained in production after the launch of the 306, and the sales proved that buyers were still very keen on a supermini of this size. However, as the 306 arrived in the showroom, Peugeot turned its attention to finally replacing the ageing 205 with a much more modern car. The new model was a significant investment for Peugeot, as it was a unique model, with no Citroen sister car to help spread the investment load. The 206 was neatly compact and benefitted from a modern interpretation of the 205’s classic pert looks. It was launched in late 1998 and annual sales rocked through the 500,000 barrier, peaking at 707,000 in 2001. Peugeot also rolled production out across the world, with factories in Brazil, Argentina, China, Iran as well as in France.
The company also exploited the 206 chassis by launching a folding roof version, a small estate, a small saloon and a van version. In 2005, it became Peugeot’s bestselling car ever. However, by early 2008, two and a half years after the launch of its 207’replacement’, 206 production had totaled 6.2 million units, with few signs of the little car being pensioned off. Remarkably, Peugeot had managed to replace the 205 with a car that was even more successful.