The 207 is designed to be the successor to the 206. However, Peugeot has decided to keep the 206 in production until 2010, though since December 2006 production has taken place in Poissy, near Paris rather than at the Ryton plant in England. The 207 is based on a modified version of the platform used for the Citroën C3, and is built in Poissy and a new plant near Trnava, Slovakia.
Initially three petrol engines were available: 1.4-litre 8v with 75 or 16v 90hp (67kW) and 1.6-litre 16v with 110bhp (82kW; 112PS). From late 2006, the 1.4 & 1.6 16v models were replaced by the new 1.4 vti 95bhp (71kW; 96PS) and 1.6 vti a 120bhp (89kW; 122PS) Valvetronic engines. Two turbocharged versions, one with 150bhp (112kW; 152PS) , and the other with 175bhp (130kW; 177PS) were also added to the range. The latter three engines result from the cooperation agreement between PSA and the BMW group. The diesel-powered engines available are a 1.4 litre 70hp (52kW) or a 1.6 litre HDi with maximum output of 90 or 110hp (82kW), the latter with the addition of an intercooler.
The 207 is available as a three- or five-door hatchback, a 207 SW Station Wagon and a 207 CC coupé convertible. A GTI version is available with the 175hp (130kW) turbocharged 1.6 litre engine.
It has sold well in Britain, being the sixth best selling car overall (and third in the supermini sector) in 2007 with more than 67,000 examples being sold.
In May 2008, Peugeot's Brazilian branch announced it would not manufacture nor import the Peugeot 207 to Brazil, but instead it would change some elements of the 206 already in production, arguing it would be impractical to do otherwise. The car features a new front end, new rear bumpers and tail lights, designed to resemble the European 207, along with a new dashboard in the interior. Minor changes were made to mechanical parts such as the suspension and gearbox. The car is now being made in Brazil and Argentina.