Mechanically, the 306 is virtually identical to the Citroën ZX, which was launched two years before the 306: both cars use the same floorpan and core structure. The 306, with its attractive Peugeot 205 derived Pininfarina styling, was a more successful car than its twin. The Citroen Berlingo and Peugeot Partner were also built on the same platform. The chassis used by the 306 and ZX was also used in the ZX's replacement, the Citroën Xsara. The sharing of platforms between Peugeot and Citroën has been parent company PSA Peugeot Citroën policy since the late 1970s, after the Peugeot takeover of the then bankrupt Citroen in the wake of the 1974 oil crisis. The first car being the Peugeot 104 based Citroen Visa and Citroën LNA. The policy continues today with the Peugeot 107, Citroen C1 and Toyota Aygo.
The 306 was first seen in its pre-production stage in 1992, but was released in March 1993 as a 3- and 5-door hatchback, with saloon, cabriolet and estate models being introduced later. The estate version was branded as the sw, for "station wagon". The Phase 1 model was known as the N3 in Australia, and introduced in 1994.