UG United Guardian Inc

• Product offensive launched in Europe with the new Peugeot Expert, Citroën Jumpy, Peugeot 3008 and Citroën C3
• Positions strengthened in Latin America, with growth of 16.4%
• Return to Iran, with agreements signed for Peugeot and DS

Regulatory News:

PSA (Paris:UG):

First-half consolidated sales in Europe rose 7.4% year-on-year to 1,056,000 units.

Peugeot sales climbed 7.9% to 601,000 units, led mainly by the Peugeot 2008 (up 16%, or 99,900 units) and Partner (up 8%, or 62,800 units), which were both ranked no. 2 in their respective segments in Europe. The 208 and 308 models continued to advance, up 15% (157,800 units) and 10% (119,200 units), respectively. Sales of the brand were particularly impressive in Italy (up 17.4%), Spain (up 12.5%) and the Netherlands (up 8.8%). This excellent performance will be buoyed in the second half of the year by various new product innovations, including the new Peugeot 2008 SUV and 3008, and the new Peugeot Traveller and Expert.

Citroën delivered its best sales performance for five years, advancing 7.2% to 414,000 units. Its strong showing was powered chiefly by the C4 Picasso, the leading MPV in Europe, but also by the C4 Cactus and the C1, which each reported sales growth for the period. In the market for light commercial vehicles, the Berlingo also consolidated its success as leader of its segment. These solid performances enabled the brand to gain ground in its biggest markets (United Kingdom, Spain and Germany). The momentum should accelerate in the second half, driven by the new C4 Picasso, the new Jumpy, the SpaceTourer and the new C3, which will replace the brand's current best seller in the autumn.

Sales for the DS brand rose 0.7% to 40,900 units, with the new DS 3 and the new DS 3 Cabrio launched in March completing the brand's entirely revisited line-up. The DS 4 and DS 4 Crossback were highly successful, with the Crossback representing 28% of total sales from these two compact premium models thanks to its strong customer appeal. The brand continues to expand its dealer network, which included 21 DS Stores and 86 DS Salons in Europe at the end of June.

In the fast-changing China & Southeast Asia market, PSA Group sales were down 19.4% to 297,000 units.

Following the arrival of the DS 4S sedan at the end of April, the Group is preparing a marketing offensive in the second half of 2016 which will see it launch five SUVs in the next two years.

As part of its Blue Upper plan, the Peugeot brand is planning to launch 18 new models in China by 2020 and, before the end of 2016, revisit the 308 Sedan and the 3008, two of its three best sellers in the world's biggest market.

The Citroën C3-XR SUV consolidated its success, with sales surging 35%. The new Citroën C6 and C4 L models will be launched in the second half of the year.

To partner growth in the SUV market segment, the PSA Group will inaugurate a new plant in Chengdu in September 2016. The Group's Shenzhen facility already manufactures the DS 6 SUV, the DS brand's best-selling model in China.

The Middle East & Africa region had to contend with an unfavourable economic climate in the first half of 2016, with imports suspended and then subject to quotas in Algeria and restrictions placed on currency access in certain countries (Egypt and Tunisia). This situation weighed heavily on the Group's sales in the region, which fell 13.3%.

The Group prepared for its return to Iran, signing a joint venture agreement in June with Iran Khodro, a long-standing Peugeot partner. The DS brand was also launched in the country at the beginning of the year, in cooperation with a private investor.

In Latin America, the PSA Group strengthened its positions, with sales up 16.4% to 88,800 units in a market down by 8.2%. The Group reported its biggest-ever market share in Chile, at over 7%.

Peugeot saw sales surge 26%, powered by excellent performances in Argentina (up 45%), Chile (up 38%) and Brazil (up 2%) in a sharply declining market (down 25%). The brand capitalised on its latest product launches: the 2008 and the new 208.

Citroën maintained its positions during the first half of the year with impressive advances in Argentina (up 29%) and Chile (up 55%). After a successful launch in Brazil, the new Citroën C3 Aircross is now sold in Argentina and helped drive the brand's good performance.

In Eurasia, despite a sharply deteriorated economic environment and a declining market, particularly in Russia (down 14.7%), the PSA Group saw its sales stabilise (down 0.1%) and continued to focus on its margins.

The Group's performance in India-Pacific was led by the Japanese market, which accounted for 49% of the Group's sales in the region. The launch of the Citroën C4 Cactus and diesel models in Japan will be instrumental in helping to boost the Group's positions in the region.

Maxime Picat, Chief Executive Officer, Peugeot brand said: "This year, Peugeot has rolled out a global offensive in the SUV market with five new vehicles. The new-look Peugeot 2008 and 3008 come at a time when the brand's performance in these segments has already positioned it among Europe's leaders. In China, its offer is rounded out by major updates to the current 3008 which will be supported by two new and exciting SUVs in the coming months. This offensive will allow us to step up growth in our global sales, which edged up 0.5% over the first half of the year."

Linda Jackson, Chief Executive Officer, Citroën brand said: "Citroën stayed on track by consolidating its global sales volumes at over 600,000 units in the first half of the year. While maintaining prices at a very satisfactory level, we reported our best sales performance in Europe for five years, gained ground in Latin America and exceeded our objectives for the C3-XR SUV in China. This performance is anchored in our product offensive which will be stepped up in the second half, notably with the new C4 Picasso, which is the leading MPV in Europe, as well as the new C3, set to replace our current best seller."

Yves Bonnefont, Chief Executive Officer, DS brand said: "With the launch of the new DS 3 in the spring, our DS range has been completely revisited in less than 12 months in line with the brand's launch strategy. The brand unveiled the DS E-Tense early in the year. This distinctive car featuring a high-performance electric powertrain embodies the future of the brand and gives a glimpse of what our future models will look like. A dealer network specifically for the DS brand is also being developed, with 234 sites across the globe. To find out all there is to know about this dedicated network offering customers a unique, bespoke experience, make sure you visit the Paris Auto Show."

About PSA Group

With its three world-renowned brands, Peugeot, Citroën and DS, the PSA Group sold 3 million vehicles worldwide in 2015. Second largest carmaker in Europe, the PSA Group recorded sales and revenue of €54 billion in 2015. The Group confirms its position of European leader in terms of CO2 emissions, with an average of 104.4 grams of CO2/km in 2015. With a fleet of 1.8 million connected vehicles on the road worldwide, the Group is on the cutting edge of innovation in this field, and is expanding its services as a mobility provider. It is also involved in financing activities (Banque PSA Finance) and automotive equipment (Faurecia).

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consolidated world sales by regions* units       H1 2015   H1 2016   %Chg           China & Southeast Asia Peugeot 207 512 162 593 -21.6% Citroën 149 784 125 174 -16.4% DS 10 774 8 740 -18.9%   PSA 368 070 296 507 -19.4%           Eurasia Peugeot 2 816 2 713 -3.7% Citroën 2 299 2 390 4.0% DS 41 50 22.0%   PSA 5 156 5 153 -0.1%           Europe Peugeot 557 187 601 313 7.9% Citroën 385 703 413 620 7.2% DS 40 654 40 942 0.7%   PSA 983 544 1 055 875 7.4%           India & Pacific Peugeot 10 438 7 983 -23.5% Citroën 2 022 1 670 -17.4% DS 524 805 53.6%   PSA 12 984 10 458 -19.5%           Latin America Peugeot 46 985 59 351 26.3% Citroën 28 635 28 994 1.3% DS 659 446 -32.3%   PSA 76 279 88 791 16.4%           Middle East & Africa Peugeot 61 700 57 382 -7.0% Citroën 38 360 29 115 -24.1% DS 796 923 16.0%   PSA 100 856 87 420 -13.3%           Total Peugeot 886 638 891 335 0.5% Citroën 606 803 600 963 -1.0% DS 53 448 51 906 -2.9%   PSA 1 546 889 1 544 204 -0.2% * including Completed Knock Down

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