Worldwide sales rose fractionally by 0.2 percent compared to the same period last year but sales were down 5.3 percent in Europe, where some governments have recently wound down trade-in schemes for old motors.
"Dragged down by the elimination of remaining scrappage incentives, traditionally strong markets for the Peugeot and Citroen brands reported weak growth or strong declines," the firm said in a statement.
However, "global automobile markets rose by six percent in the first half of 2011," led by demand for passenger cars in China and passenger cars and light commercial vehicles in Latin America and Russia, it added.
"In Europe, the passenger car and light commercial vehicle market declined by 0.8 percent overall, reflecting a still challenging business environment, with performances widely varying by country."
Sales fell 25 percent in Spain and 12 percent in Italy, and grew by two percent in France and 11 percent in Germany. In Russia they soared 65.5 percent to 35,400 vehicles.
France's second-biggest automaker Renault on Monday reported that first-half vehicle sales fell 7.4 percent in Europe but said it expected record sales worldwide thanks to booming emerging markets.
Renault's sales rose 1.9 percent to 1.37 million vehicles worldwide, but in Europe they fell 7.4 percent to 831,700 units.
Renault said it was hoping to sell more than 2.6 million vehicles over the whole of 2011, as its international sales improved, diverging from its weaker performance in France and throughout Europe.
PSA Peugeot Citroen echoed this reliance on non-European markets.
"The Group is confirming its target of generating 50 percent of sales outside Europe in 2015," it said.
Its executive vice president for brands, Jean-Marc Gales, said in Tuesday's statement the company is successfully "shifting the model range mix further upmarket."
It plans soon to launch the world's first diesel-electric "hybrid" car, the Peugeot 3008 HYbrid4, and a new version of its classic DS model, the DS5.