Developed from Projet M24 and introduced on 25 February 1983, the 205 replaced the Peugeot 104 and the Talbot Samba, using major elements from their design.

A key ingredient of the success of the 205, it had MacPherson struts at the front and trailing arms with torsion bars at the rear.

The diesel models employed the PSA XUD engine, lifted from the Citroën BX which was introduced in September 1982.

There was also the "205 Multi", a tall-bodied special version on XA or XE-basis built by independent coachbuilders like Gruau and Durisotti.

There was a dashboard redesign for the 1988 model year, and in late 1990 the 205 received a minor facelift with new door design and cards, clear front indicators, new 'smoked' rear light clusters, single point petrol injection and catalytic converters were introduced, to meet the new 1992 pollution limits.

[11] Due to the pressure from the market, with buyers wanting a Peugeot supermini in the mould of the 205 again, the company finally built a direct replacement in the 206, which was launched in 1998.

[12] The 205 was first available as a GTI in 1984 (the same year that the three-door bodystyle debuted) and was initially powered by a fuel injected 1.6 petrol engine.

The 5 door model was called the GT, and used the same 1360 cc TU3s engine as the XS (UK) From 1994, the X/G trim scheme was replaced by Mardi Gras, Colorline, Forever and Accent.

There is also an SI version believed to have been released in Australia and Japan, featuring a 65 kW 1.6 engine with max torque of 132 Nm offered in either 4-speed automatic or 5-speed manual transmission, it had styling from the GTI inside and out, drive.com.au were quoted as saying: "Although the 205 graced Australian shores with the GTi model in 1988, It wasn't until 1992 (with the Japanese Yen rising and memories of the Rainbow Warrior fading) that it made fiscal sense for Peugeot to start selling a version that could compete on price with the Toyota Corolla, which at the time was Australia's biggest selling small car.

"[14] The 1.6 litre GTI was launched in 1984, and came with a XU5J engine, producing 105 PS (77 kW; 104 hp), for the 1987 model year the XU5J received the cylinder head with larger valves thus becoming XU5JA.

Internally these engines are very similar, the main differences on 1.9 litre versions being the longer stroke, oil cooler, and some parts of the fuel injection system.

The main aesthetic difference between the GTI/CTi versions and other 205 models were the plastic wheel arches and trim, beefier front and rear bumper valances.

The shell also underwent some minor changes, including larger wheel arches (to suit the larger wheels on the GTI and CTi), and the suspension was redesigned and sat lower on the GTI with stiffer springs, different wishbones and a drop-linked anti-roll bar.

[citation needed] Nothing ever came of such rumours, however, and any talk of Peugeot expanding its presence in US became moot when the company was forced to pull out in 1991.

Sales of the GTI in the United Kingdom in the early 1990s were badly hit by soaring insurance premiums, brought about by high theft and 'joyriding' of cars of this sort.

Increasingly stringent emissions regulations meant the 1.6 GTI went out of production in 1992, while the 1.9-litre was sold for a couple more years thanks to re-engineering of the engine to enable it to work properly with a catalytic converter, which dropped power to 122 PS (90 kW; 120 hp).

The Gentry was a limited edition version of the 205, it had 1.6 GTI suspension combined with a detuned 105 bhp (78 kW; 106 PS) 1.9 litre engine (as fitted to export market GTIs such as those for Australia and Switzerland) but with an automatic gearbox.

Due to a breakdown in trade negotiations the production run ceased at what was believed to be 33 units which were subsequently sold off to the European market.

[citation needed] The Griffe was a special GTI edition for mainland Europe, and was sold in France, Germany and the Netherlands.

[17] The car was black with 'Radio 1FM 25th' bodywork decals, grey Speedline alloy wheels and came with all options fitted as standard, including ABS, air conditioning, full leather interior, remote central locking, catalytic converter and power steering.

The car was initially marketed towards executives, with soft cloth bucket seats in Beige with matching carpet and dashboard, as also found in the Gentry models.

This edition of the 205 was positioned as a cost-effective alternative to the 205 GTI, retaining its sporty character, but being less expensive to buy or maintain.

The 205 Rallye was completely stripped of almost all soundproofing, electrical systems or other luxury items, bringing down the weight to no more than 794 kg (1,750 lb).

Its minimalistic equipment, together with the high revs needed to unleash all of the engine's horsepower, gives the 205 Rallye a very spartan character and makes it a difficult but rewarding car to drive hard, which is one of the reasons it is now very popular among 205 GTI enthusiasts.

In the end 30,111 Rallyes were produced, even though they were only sold in certain mainland European markets (including France, Belgium, Portugal, Spain, Italy, Greece and the Netherlands).

In 1992 Peugeot introduced the Rallye to the UK market, it was available in three colours (500 white, 250 yellow, 80 blue) and was essentially a re-badged XT.

The body was built by Heuliez, where standard three door bodyshells from the production line were delivered and heavily modified.

Later competition vehicles of the Evolution 2 series (VIN C201 to C220) were built differently as the rear spaceframe had no more sheet steel profiles in it but was composed entirely of tubes.

[20][21] Outwardly similar to a normal 205, the T16 had wider wheel arches, and the whole rear section lifted up to give access to the engine.

[22] Peugeot Talbot Sport's factory 205 T16s under Jean Todt were the most successful cars to compete in the last two years of the World Rally Championship's Group B era, winning the 1985 and 1986 Constructors' and Drivers' titles with Timo Salonen and Juha Kankkunen respectively against such notable competition from Audi, Lancia and Ford, with an Evolution 2 model being introduced for the latter of those two seasons.