The ad, by Euro RSCG, stated that the couple in the ad had recorded a usage of 126mpg in the Peugeot 308 without needing to stop for fuel. A footnote further stated it to be a world record.
The complainants did not believe the average consumer would be able to achieve 126mpg in the car.
Peugeot said the couple in the ad travelled a total of 3,700.1 miles and used 29.175 gallons of fuel in the car with an average of 126.82 miles per gallon.
It said the information in the ad was accurate and supplied documents relating to the world record attempt.
The advertiser said the figures were achievable under normal driving conditions and the couple in the ad were driving a standard 308 on normal roads.
However, it added that they had been driving in a way that would maximise the mpg used.
The ad was intended to showcase the car but also explicitly showed what could be realistically expected.
The ASA felt the ad did not clarify that the 126mpg had been achieved as part of a genuine world record attempt and therefore readers may infer that a similar figure was achievable under normal driving conditions.
The watchdog therefore felt the ad was misleading.
It told Peugeot not to suggest in future advertising that fuel consumption figures not achieved under normal driving conditions could be achieved by the average consumer.
It said that the ad must not appear again in its current form.