The visit to the exhibition was not wasted, however, as he also came across the revolutionary invention of Gottlieb Daimler, a reciprocating combustion engine powered by petrol/gasoline.

As soon as the exhibition was over Daimler arranged for his engine to be assembled in France by Panhard et Levassor of Paris and came to an agreement with Peugeot for its use in a new quadricycle.

Sarazin's acquisition, before he died, of the rights to manufacture the Daimler combustion engine in France, made his widow, Louise, a key figure in the early life of the motor industry in France, which would be the world's top auto producing nation till out-produced by the United States in 1906.

The Peugeot Type 2 was powered by a two-cylinder four stroke V-format petrol/gasoline engine, assembled under licence from Daimler.

The engine was mounted underneath the seat, above and slightly ahead of the rear axle to which it was linked by a chain-drive.