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(July 13, 2001) PARIS -- French carmaker PSA Peugeot Citroen is believed to be preparing a review of its media business in the U.K., Germany and Belgium, currently at Aegis Group-owned Carat International.

The review has been sparked by Carat's decision to part company with the estimated $259 million business in those three markets, according to local reports. Carat won a massive pitch in mid-2000 to handle global media planning for PSA's French rival Renault.

PSA's advertising manager in Germany, Hans Sotar, confirmed that the automaker "would not prolong [our] contract with Carat" at the end of the year but did not clarify whether Carat has resigned the account. Agencies would be invited to make presentations shortly, added Mr. Sotar.

Agencies likely to be shortlisted are Publicis Groupe's Optimedia, Duesseldorf, which lost Renault's pan-European business last year; Zenith, Frankfurt, jointly owned by Publicis Groupe and Cordiant Communications Group, which launched its operations in Germany in 1994 with Peugeot as a client; and Interpublic Group of Cos.' Initiative Media, which does not have an auto client in Germany.

PSA spent $153 million in Germany last year, with $83 million going to Peugeot and $60 million to Citroen, according to AC Nielsen figures.

In the U.K., PSA marketing executives are believed to be hearing pitches from Havas Advertising's MPG, Omnicom Group's OMD and Optimedia -- all of which are also pitching for the carmaker's $250 million French budget -- as well as from Initiative Media, according to published reports. PSA announced it was reviewing its French business in early May with an announcement expected by early fall.

U.K. executives at PSA and Carat International declined to comment on the review.

Global creative work on the Peugeot and Citroen accounts is managed by the Havas' Euro RSCG network from Paris.

The French group is having a record 2001, with European sales of 1.3 million vehicles in the first semester up 9.3% over the first six months of 2000.

The statistics are stoked by strong demand for new Citroen models including the C5 sedan and the Xsara Picasso compact minivan, as well as strong orders on Peugeot's new 206 compact convertible.

Globally, PSA's 1.6 million sales in the first six months of 2001 represent 10.6% growth over global sales in the first half of 2000. -- Dagmar Mussey, Lawrence J. Speer and Ali Qassim

Copyright July 2001, Crain Communications Inc.

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