China, new models boost Peugeot Citroen unit sales

French carmaker PSA Peugeot Citroen posted a 16.9 percent rise in first-half sales, helped by new models such as the DS3, C3 Picasso and RCZ coupe and strong growth in China.

Leaving aside sales of completely knocked-down (CKD) kits -- shipped for assembly in other markets -- sales rose 16.8 percent to 1.62 million vehicles, Europe's second-largest carmaker behind German peer Volkswagen said on Wednesday.

Carmakers have benefited from incentive schemes to scrap old cars, but many of the schemes are finished or finishing and the second half was expected to be tough as economic worries and new tax measures take their toll on consumers. PSA repeated that it expected the European car market to decline by around 9 percent year-on-year in 2010 and said it expected to gain market share in Europe this year.

Peugeot and Citroen brand head Jean-Marc Gales struck an optimistic note, saying June orders, which will be reflected in sales figures later in the year, were "very strong. The group achieved well over a third of the French market in terms of orders in June".

The Chinese market will likely see double-digit percentage sales growth this year, while Latin American markets were expected to post single-digit growth, PSA said.

Citroen head Frederic Banzet told a news conference: "China is the number one priority for Citroen's development." Banzet said 14 percent of Citroen sales this year were in China, up from 10 percent in 2009.

Gales said the group would make an announcement on Friday on the manufacturing joint venture it agreed with China's Changan in May. He did not give further detail.

Gales would not comment on a report that PSA could revive a plan to set up a manufacturing plant in India with an investment of around 700 million euros.