Peugeot 204 Turns 60: The Compact That Changed Front-Wheel Drive Forever

The 1965 Peugeot 204 Was Built to Win—And It Did

In 1965, Peugeot launched the 204, its first front-wheel-drive production car. The goal? Fill the gap left by the out-of-production 202. Peugeot needed a compact, efficient sedan for the lower-middle segment of the French market. The 203 was too large and expensive. So engineers were given a clear directive: build a family car that matched the space of the 403, hit over 130 km/h (81 mph), and still delivered strong fuel economy. They did all that and more.

Product Strategy: A Clear Brief, Aggressive Execution

The Peugeot 204 was developed fast. Prototypes appeared in 1961. Pre-production cars hit the road by 1963. By April 1965, Peugeot debuted the sedan in Paris with over 5,000 pre-orders already in hand. The 204 instantly reset expectations for small cars in Europe.

Here’s what Peugeot wanted:

• Cabin space like the 403.
• Real five-passenger capacity.
• Cruising speed above 80 mph.
• Low fuel consumption.
• Compact footprint.

They hit every target.

A Clean Break from Old Peugeot

The 204 replaced the 1950s design language with something fresher. The body was short but roomy, abandoning the tailfin-heavy American styling of the Peugeot 404. While the exterior still leaned on curves, the look was modern and practical.

First Front-Wheel-Drive Peugeot: Game Changed

The 204 introduced front-wheel drive to Peugeot’s lineup. More importantly, it used a transversely mounted engine, uncommon in 1965. The car was powered by a newly developed 1.1-liter (1130 cc) inline-4 engine, delivering 53 hp. This all-aluminum engine was the first full light-alloy motor in a French production car.

Key specs:

The drivetrain was mounted in a single unit, combining engine, transmission, and differential. That meant better packaging, lower weight, and easier servicing.

Suspension and Braking: Far Ahead

The 204 offered independent suspension on all four wheels. Up front, it used wishbones; in the rear, trailing arms. This layout gave it better ride quality than most rivals. It also had front disc brakes, a rarity in its class at the time.

Strong Demand Drove Quick Expansion

Peugeot wasted no time expanding the lineup:

1. 204 Wagon (Break) – launched October 1965. First use of the “Break” badge, lasting until 2001.
2. 204 Luxe trim – introduced in March 1966 for lower pricing.
3. 204 Coupé and Cabriolet – both launched in 1966 with shortened wheelbase and sportier looks.
4. 204 Fourgonette – commercial van, added in 1967 with increased load space.

The 204 Coupé and Cabriolet featured a shorter wheelbase and stiffer suspension. They hit nearly 145 km/h (90 mph) thanks to a slightly upgraded engine. The design came from Peugeot’s in-house studio, not Pininfarina, breaking from tradition. The rear light design was so popular that it was carried over to later 204 sedans and wagons.

Price Strategy: Cut Costs, Grow Volume

By sharing most mechanical components, Peugeot kept costs low. The Coupé and Cabriolet only cost about 20% more than the base sedan. Compare that to the Peugeot 404 Coupé by Pininfarina, which cost 60% more than its sedan counterpart. The smart pricing helped Peugeot grow share quickly across multiple buyer profiles.

Diesel Innovation: Tiny Engine, Big Impact

In 1967, the 204 van introduced a 1.255-liter diesel engine—the smallest production diesel in the world at that time. Initially used only in commercial versions, the diesel engine soon appeared in wagons too. It extended the 204’s appeal to economy-focused buyers and helped Peugeot enter new markets.

Performance of Diesel Model

The diesel-powered Fourgonette gave buyers more torque and fuel efficiency. The load capacity exceeded 1.5 cubic meters, putting the 204 at the top of its class under 4 meters long. These commercial variants were particularly popular in France and parts of Northern Europe.