The engine was a German design by Daimler but was licensed for production in France by Panhard et Levassor and then sold to Peugeot. It was a 15° V-twin and produced 2 bhp, sufficient for a top speed of approximately 18 kilometres per hour (11 mph).
World record
Peugeot decided to show the quality of the Type 3 by running a demonstration model alongside the cyclists in the inaugural Paris–Brest–Pariscycle race in September 1891, thus gaining official confirmation of progress from the race marshals and time-keepers. His chief engineer Louis Rigoulot and rising workshop foreman Auguste Doriot proved the robustness of the design, as this demonstration car ran for 2,045 kilometres (1,271 miles), from Peugeot's factory in Valentigney to Paris, over the race course, and then back to Valentigney, at an average speed of 14.7 km/h (9.1 mph), without major malfunctions. This was the longest run to that time by a petrol-powered vehicle and about four times as far as the previous record set by Léon Serpollet from Paris to Lyon. The demonstrator became the first Peugeot sold to the public.
A lightened Type 3 was entered into the Paris–Bordeaux–Paris race in June 1895, finishing second and maintaining an average speed of 21.7 kilometres per hour (13.5 mph).
1 These cars were marketed as "Lion-Peugeots", produced by what was till 1910 a separate Peugeot company, run by cousins of Armand Peugeot, then in charge of the principal automobile business.
In 1910, Armand having no sons of his own, it was agreed that the two branches of the Peugeot business be reunited.