Peugeot 206 Gearbox Issues

Sounds like a pain! I had something similar happen with my Peugeot 206, though mine's a petrol. Symptoms were pretty much identical - the gear indicator going kaput and the transmission acting like it had a mind of its own. Did you check the TCM? In my case, it turned out to be a fried transmission control module. Have you had it scanned with a decent diagnostic tool yet? What codes are popping up?

Yes, I scanned it and it pointed towards the control unit as well, which makes me think it's probably the same issue. What specific fault codes did you get? That will help me confirm my diagnosis, as I need to be certain before I replace any components.

Right, I remember now, the codes were pointing towards implausible data from one of the speed sensors and also a general communication error with the TCM. Basically, the whole system was just throwing a fit. I spent ages messing around with wiring and sensors, but in the end, the garage confirmed it was a faulty TCM. Best bet is to take it to a reputable workshop with experience in Peugeots; they'll be able to properly diagnose it and get you sorted. It cost me about 1000€ with parts and labour.

Thanks a lot for sharing your experience! It seems I'm facing the same problem and from what I've researched I am expecting a similar repair cost to yours. I'll book it into the workshop and hopefully get it sorted soon.