The marque duly produced the purpose-built 208 T16, which boasted 875bhp, weighed 875kg and produced a maximum 650lb ft of torque.
The car's bodywork was specially constructed, and it also used the rear wing of Peugeot's Le Mans 24 Hours-winning 908.
The T16 flew from the outset and Loeb dominated qualifying for the event, running almost five seconds per mile quicker than the rest of the field.
The Frenchman then smashed the course record at the first attempt. His time of 8m13.878s was a minute and a half under the previous record.
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