Another customer for the Daimler licensed engines produced in Paris was Peugeot, which also began producing petrol-driven cars. With their vehicles powered by Daimler licence engines, Panhard & Levassor and Peugeot began to develop the automobile market in France from 1891. French customers showed much more interest in the then new type of petrol car than was the case in Germany.
The widespread enthusiasm for the emergence of motoring in France - similar to that of the bicycle a few years earlier - led almost inevitably to the organisation of sporting competitions, which subsequently sprang up all over the country. The first race of a sort was the 126-kilometre Paris-Rouen long-distance drive on 22 July 1894, which was actually a reliability trial, but was also about which starter would be the first to reach the finish line in the northern French city. The event was organised by Pierre Giffard, the publisher of the Paris-based newspaper "Le Petit Journal".
Of the 21 (out of 102 registered) vehicles that rolled onto the starting grid in Paris, 14 were petrol-powered, while the remaining seven were steam-powered - a circumstance that makes it clear that the "competition between the systems" of petrol engine, steam and electric drive was in full swing in those early days of the automobile. In the 1890s, it was by no means foreseeable that the petrol car would ultimately win the race. One of the steam-powered vehicles, a 20 hp De-Dion-Bouton, was actually the first to reach the finish line in Rouen. However, the winning vehicle was disqualified because its design as a steam tractor unit with a passenger carriage did not comply with the terms of entry, which only permitted four-seater vehicles.
Peugeot brought five vehicles to the start: in addition to three four-seater cars, there was also a three-seater and a two-seater. All five were equipped with "Système Daimler" engines, which Panhard & Levassor had manufactured under licence. The Parisian manufacturer also entered the race with four of its own cars, which also had this engine.
All ten vehicles with Daimler engines – five Panhard & Levassor cars, including one modified by Vacheron, and the five Peugeots – reached the finish line in Rouen, and so the first prize of 5000 francs was split between the two manufacturers. Of course, none of these or any of the other vehicles that crossed the finish line were "racing cars" as we understand them today; nevertheless, the cars from Peugeot and Panhard & Levassor that won the first motorsport event rightly have a firm place in the lineage of competition vehicles.
Power was provided by a two-cylinder V-engine from Panhard & Levassor, "Systeme Daimler", which had a displacement of just under one litre. At 620 rpm, the engine produced 3.5 hp/2.6 kW, and the cylinders and cylinder heads were made of grey cast iron. The engine timing was only rudimentary at that time: while the intake valves remained uncontrolled, the work of the side exhaust valves was regulated by means of a centrifugal governor. The engine was lubricated by a drip oiler; only the cylinder head was water-cooled.
On the journey from Paris to Rouen, the two-cylinder engine demonstrated qualities that are still decisive today: endurance and reliability, and that's what was stipulated in the entry criteria: "The winner will be the car that best fulfils the criteria of being "safe to use, easy to operate and not too expensive to run" (" être sans danger, aisément maniable pour les voyageurs et de ne pas coûter trop cher sur la route ")."
Incidentally, it should be noted that the "Système Daimler" engine had already given a remarkable demonstration of its reliability three years earlier, in September 1891. One of the first Peugeot cars had accompanied the inaugural Paris–Brest–Paris bicycle race as a non-competitor. The race covered around 1200 kilometres and was also organised by "Le Petit Journal". Not only did it complete the entire distance of the race, but it had previously already driven on its own power from the Peugeot plant in Valentigney to Paris – 460 kilometres – and then back from Paris to Valentigney. With a total distance covered of well over 2000 kilometres, it demonstrated the potential of the petrol-powered car even more impressively than the Paris–Rouen race three years later.
The next race was not organised by a newspaper, but by the racing committee set up for this purpose, which subsequently became the Automobile Club de France. The task that the participants had to face from 11 to 14 June 1895 was far more ambitious than eleven months earlier. The route was from Paris to Bordeaux and back, a total of 1192 kilometres, with the journey from Paris to Versailles taking place as a non-classified parade. In the end, the decisive factor was the speed or rather the time of arrival in Paris.
Of the 46 registered vehicles, 23 were at the start, including 6 with steam engines and 1 with electric drive. Peugeot took part with three cars – one two-seater and two four-seaters. Within the limit of 100 hours defined in the regulations, 9 participants reached the finish line – 1 steam car and 8 petrol-powered cars, including the two Roger-Benz's and 6 vehicles with Daimler or Daimler licence-built engine. The two-seater Peugeot piloted by Paul Koechlin crossed the finish line in second place after 54 hours and 35 minutes – almost six hours after the Panhard & Levassor, also a two-seater, with Émile Levassor at the wheel. The first prize of 30,000 francs went to Louis Rigoulot's four-seater Peugeot, which crossed the finish line more than five hours after Koechlin and eleven hours after Levassor. Amédée Bollée's steam bus was the last of the nine vehicles to reach its destination after a journey time of just over 90 hours – 41 hours after the arrival of Émile Levassor. Another thirteen and a half hours later – and thus almost four hours over the 100-hour limit imposed by the regulations – the Michelin brothers' car with pneumatic tyres arrived in Paris.
In the years that followed, vehicles with Daimler licence engines won numerous other events. From 1897 onwards, Peugeot relied on self-developed engines for its vehicles, which were used instead of the Daimler licence engines supplied by Panhard & Levassor.