Sales in the UK were strong, with the 106 being the 11th most popular new car in the country in 1993.
Its power came from 1.0-litre and 1.1-litre carburettor petrol engines and a 1.4-litre fuel injection unit, as well as a 1.4L Diesel engine which was later dropped in mid/late 1994 and replaced with a more refined and more economical 1.5-litre unit of 1527cc. A 1.6-litre fuel injected engine was introduced on the 1995 XSi model, with 120 mph (193 km/h) top speed.
In the UK trim levels were basic XN, mid-range XR, top-spec XT, and the sporty XSi model mentioned above. In addition, from 1994 onwards there was a "Rallye" model offered. This was different from the XSi model with the TU2 series 1.3 litre petrol injection engine (100 bhp). This was designed for clubman rallying and the sporting driver, and had little in the way of creature comforts, such as electric windows, power assisted steering etc. On the phase 1 model, a sunroof and anti lock brakes were the only options available from the factory, although many came with foglights or spoilers from the XSi models. In Portugal there was a special edition of 50 units of the Rallye, called R2, which feature extensive use of sporting material from the Peugeot-Talbot racing division which went even further with the extreme nature of the Rallye, with changes to the suspension, brakes, new 14inch speedline rims, racing seatbelts, and engine management and exhaust upgrades to produce 106PS.
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 the new GTi model with a 1.6 16v engine.
From 1997-1998 the Phase 2 Rallye was offered, and these combined the light, nimble chassis of the Phase 1 Rallye, with a 1.6 litre petrol injection engine (TU5J2, 103 bhp) and updated looks and safety features of the later models (1996-1999). Optional Extras on the Phase 2 Rallye were; Power assisted steering, airbag and a sunroof. From 1996-1999 trim levels were XN, XL, XR, XT, XS and GTi. In France a five-door version of both XS and GTi versions were offered.