A CONFIDENT Peugeot has announced much-improved profits for 1996 and confirmed the new UK-built 206 small car will be launched at the end of next year. Managing director Dick Parham said UK sales had topped £2 billion for the first time, and profits of £30.5 million were the highest since 1991 - up by more than £25 million on 1996.

'There were some worrying trends for us,' said Parham. 'Firstly, diesel sales fell for the second consecutive year to 18% of the total market. Secondly, the fleet market increased and represented over 47% of total UK sales, which raises the level of our selling costs. However, 1996 was a good year - we sold 153,242 cars compared with 143,321 in 1995, boosting our market share to 7.57%.'

The new 206 will be the spiritual successor to the record-breaking 205, fitting between the 106 and 306 in the line-up. Further new models this year include the 406 Coupe and the 306 estate. Parham vowed to continue with Peugeot's current daily rental policy, saying the balance was 'about right' at 10,000 units a year.