Phase II
In early 1996 the Peugeot 106 also formed the basis for the near identical Citroën Saxo, and at this time the 106 received a facelift which saw all engines get fuel injection and equipment levels raised. The XSi was dropped in favour of a basically similar new GTi model added to the range.
At the end of 1998, the Peugeot 106 range was slimmed down to the sparsely-equipped 1.1 L petrol and 1.5 L diesel models as well as the 1.6 GTi. This was due to the launch of the larger 206, which stole many sales from the 106. Peugeot initially intended to phase the 106 out and market the 206 as its replacement, but later decided to replace the 106 with another all-new model.
After 12 years in production, the last Peugeot 106 rolled off the production line late in 2003. Its replacement, the 107, has been available since early 2005. By the time production ceased, the Peugeot 106 was one of the longest running production cars still made in Europe but it was still proving fairly popular, especially in its home market of France.
Although it was being left behind by more modern cars with more in the way of quality, refinement, space and comfort, it was still considered one of the best drivers' cars on the European mini-car market.