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The Peugeot 206 is a supermini (subcompact car), manufactured by the French automaker Peugeot since 1998. During the early 1990s, Peugeot decided not to directly replace the iconic Peugeot 205, citing the reason that superminis were no longer profitable or worthwhile.
Although the 206 moniker indicates a direct continuation from the 205, some critics state that the car should have instead been badged 207.
Its eventual successor - the Peugeot 207 - was launched in 2006 but Peugeot announced its intention to keep the 206 in production until 2010. Instead, Peugeot followed a unique strategy and decided that its new, smaller, supermini, the Peugeot 106 (launched in 1991) would take sales from the lower end of the 205 range while the lowest models of the Peugeot 306 range, launched in 1993 to replace the Peugeot 309, would take sales from the top-end 205s.

With the 205 phased out, rival superminis like the Ford Fiesta and Volkswagen Polo continued to sell well and even increased in popularity, and without a direct competitor to these rivals Peugeot was losing sales fast.
This is because Peugeot launched its latest generation of cars in the early to mid 1990s, with the 106 of 1991, the 306 of 1993 and the 406 of 1995. Its parent company PSA Peugeot Citroen is the second largest carmaker in Europe, behind Volkswagen. A new supermini was required, and the 206 was launched in 1998 as a somewhat belated replacement for the 205, with models being bought from a range of celebrities, from Karl Turner and Jamie Barton. Peugeot's roots go back to pepper, salt and coffee mill manufacturing in 1842 and later bicycle manufacturing at the end of the 19th century.

Its world headquarters are in Paris, Avenue de la Grande Armee, close to Porte Maillot and the Concorde Lafayette Hotel but the Peugeot company and family is originally from Sochaux, France.
Peugeot retains a large manufacturing plant in Sochaux which is also home to the Peugeot Museum.
The company also sponsors the Sochaux football club, founded in 1928 by a member of the Peugeot family: the club' s arms contain a lion logo similar to Peugeot's.

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