Organisers said about 800 workers marched from the city's central Saint Lazare railway station, voicing their anger at the planned closure of an
emblematic plant at Aulnay, north of Paris.
They shouted "No to Aulnay's closure" and "A billion in its bank accounts and PSA wants to close".
The protest came as President Francois Hollande met union members and promised three-tier negotiations involving the state, management and unions.
A damning government-sponsored report said Europe's second-biggest automaker which recently entered a limited alliance with General Motors of the United States, had to revamp urgently and and tie up with a global group after posting sweeping losses.
PSA Peugeot Citroen, which is not controlled by the French state and in which the Peugeot family keeps a strong voting interest, has dropped out of the Paris CAC 40 leading stock index and been beset by poor sales.
Struggling with losses from falling European sales which account for about 50% of total sales, Peugeot this summer shocked France by announcing it planned to cut 8,000 jobs and close the historic Aulnay plant.