Sources close to the pitch told Campaign Asia-Pacific that initial meetings have already taken place, and a shortlist is expected soon.
Carat has held the account for more than three years.
Shenzhen-based Changan PSA Automobile has sold imported vehicles since June 2012 and locally assembled DS line cars since summer 2013.
China is PSA Peugeot Citroën’s second-largest market, with sales rising 7.2 per cent in 2012 to 13 million passenger cars and 12 million light commercial vehicles. The market accounts for 20 per cent of the company's global sales.