CM&W won the business after a five-way pitch against Rapier, Billington Cartmell, the incumbent and one unnamed agency.
CM&W's brief will be to improve Peugeot's after-sales customer support and new car sales using digital and DM.
The pitch was held because of a statutory review of EHS Brann's contract, which expired in September. Peugeot contacted agencies in March.
EHS Brann's Peugeot relationship dates back to 1992, when Brann Agency UK won the business in a final shoot-out against WWAV Rapp Collins.
The agency retained the business in 2002 in a pitch called after Evans Hunt Scott and Brann merged.
The appointment comes as Peugeot, also a long-time client of EHS Brann's parent, Euro RSCG Worldwide, faces a difficult time. Figures show UK car sales in October fell 11 per cent to 152,497.
Peugeot also slashed production of its 1007 van just six months after its launch because of poor sales.
The company had to cut production capacity at its Poissy plant near Paris to 70,000 units a year. Its goal was 130,000 at its April launch.
Holding company PSA/Peugeot Citroen is set to lay of 550 temporary workers by the year end as a result.