The all-new second generation of the Clio was launched in the fall of 1997, with considerably more rounded and bulbous styling than its predecessor. Part of the radical concept of the new Clio were many components made of unusual materials to save in weight and repair costs[citation needed]. For instance, the front wings were made of plastic (Following on from criticisms of corrosion in this part of the previous model and based on technology developed for the Renault Espace) and the material of the bonnet was aluminium in some versions. Originally the engine lineup was similar to before, with 1.2L, 1.4L and 1.6L petrol engines and a 1.9L diesel. In early 1999, a sportive 16V version equipped with a new 1.6L 16-valve engine was introduced, and eventually, all the older petrol engines were upgraded to more powerful and more economical 16-valve versions.

In 1998, Renault launched the 169PS (124kW) Clio Renault Sport (also known as Clio RS for short, named Clio Renault Sport 172 in the UK – 172 coming from the DIN method horsepower measurement), with a 2.0L 16-valve engine and a top speed of 220km/h (140mph). But in this form, the car is capable of surprisingly good handling and performance[neutrality disputed]. The top-of-the-range Clio, however was the mid-engined, rear-wheel drive Clio V6 Renault Sport, originally engineered by Tom Walkinshaw Racing for a one-make racing series, which placed a 230PS (170kW) 3.0L V6 engine, sourced from the Renault Laguna behind the front seats, with a top speed of 235km/h (146mph).

A facelift occurred in the spring of 2001 which saw the exterior restyled (most visibly the headlights were made more angular), the interior quality improved and a 1.5L direct injection Diesel engine added. In 2005 the Phase 2 model was facelifted with a restyled front and rear. The number plate moves from boot to bumper and a better specification on all Campus models introduced. The Clio Renault Sport’s power was improved to 179PS (132kW) (in the UK, the designation RS 182 was adopted, once more using in reflection of DIN-measured horsepower).

After the introduction of the Clio III in 2005, Renault continues to market the Mk 2 as the Renault Clio Campus , with a reduced engine and model range. In the UK, the model continues to sell alongside the newly introduced Renault Twingo, which shares its floorpan and retails at the same price level.

Clio Symbol / Clio Classic / Clio Sedan / Symbol / Thalia (1999-present)

In 1999 Renault launched the saloon version of the Clio II, named Clio Symbol (Turkey, Romania,Poland and Bulgaria), Thalia (the rest of Europe), Clio Sedan (South America) and Clio Classic(Asia and Oceania]]). Originally, the car was intended for sale in developing countries, but due to demand, it was later made available in countries where saloons were traditionally preferred over hatchbacks, most notably in Eastern Europe, where the Thalia is cheaper than the Clio, but is still about 30% more expensive than the Dacia Logan, which is also sold by Renault in that market but is a low cost model. In some markets, the sedan is offered as the Nissan Platina (manufactured in Aguascalientes, Mexico).The sedan version of Clio was facelifted in 2002,with new exterior similar to facelifted Clio,better equipment and safety levels.

In fall of 2006, an improvised Clio Sedan has been offered in Romania,Bulgaria,Turkey and Poland as Renault Symbol.In all the other countries the names weren’t changed. This model features the interior of the facelifted Clio II with very minor parts commonality with Megane II, as well as new standard and optional equipment, such as automatic air conditioning and a CD player. The model earned moderate reception in the domestic market. Nonetheless, it is expected to remain in production until late 2008, when a sedan version of Clio III is expected.