Peugeot had to replace the successful 405 with something better and managed to do that only in 1995 when it unveiled the 406 and the 406 Break that followed in the next year.
The 406 was the last of the ’80s style mid-size vehicles on the European market. Even the ancient Ford Sierra was replaced by Mondeo, while Opel/Vauxhall and Fiat were already on the facelift stages with their cars. Peugeot waited for a while, but when it introduced the 406, it stirred the market. In the station-wagon shape, it offered an alternative for the MPV segment.

With its narrow headlights and a slatted grille, the 406 followed some design cues from its families. On the plus side, it showed an elegant yet sporty profile, even in the station-wagon shape. Its body-colored door-handles and door-mirrors and the rubber strip on the lower section made the car loos longer. In the back, the additional side windows were raked-forward, following a parallel line with the tailgate.

Inside, the new trend with the center stack extended on the center console isolated the driver into its part of the cabin. Modern technologies for its time, such as the digital climate control or the LCD at the bottom of the dials, transformed the 406 into a modern family station-wagon. In the back, the 406 Wagon offered enough room for up to three passengers and a big, 526 liters (18.6 cu-ft) trunk with all the seats in place.

Under the hood, Peugeot offered up to eight engine choices, depending on the market. While the French carmaker paired all versions to a standard five-speed manual, a four-speed automatic was available for selected versions.