PSA - 2019 Universal Registration Document

ANALYSIS OF THE BUSINESS AND GROUP OPERATING RESULTS IN 2019 AND OUTLOOK Investment in research & development

INVESTMENT IN RESEARCH & DEVELOPMENT 4.5.

Automotive Expertise to deliver useful technologies

Innovation, research and development are powerful levers for developing competitive advantages by addressing the major challengesfaced in the automotiveindustry(environmental,safety, emergingmobility andnetworkingneeds, etc.).

Every year, Groupe PSAinvests in research and developmentto stayahead,technologically, of environmental ndmarket changes.

The R&D strategy in the “Push to Pass” plan 4.5.1.

R&D ATTHE HEARTOF THE CORE

THE CORE TECHNOLOGY 4.5.1.2. STRATEGY

4.5.1.1. MODEL STRATEGY

Throughits Push to Pass strategicplan, the Grouphas decidedto launcha productoffensivethat is focusedon its customersand on its leadingglobal profit pools by releasingone new car per region, per brand andper year. To enactthis ambitiousplanas efficientlyas possible,Groupe PSA’s R&D developsall its Peugeot,Citroën,DS, Opel and Vauxhallbody styles through global, multi-brandand multi-regionprogrammes that helpmaximise the reuse of parts. These body designs are created on two lighter, multi-energy platforms,and offer greatmodularityin termsof length,heightand wheel diameter,to addressthe challengesfaced in terms of mass, environment and functionalities. Themid- and high-endbodydesignsof the C andD segmentsof n all the Group’sbrands (sedans, coupés , MPVs, SUVs and LCVs) are developedon the EMP2EfficientModularPlatform,launched in 2013.In additionto petroland dieselengines,this platformhas a plug-inhybridpetrol-electricpowertrain(PHEV)that offers an electricalternativefor all vehiclesdevelopedon EMP2startingin 2019. The segmentB city car modelsup to the compactSUVs,as well n as the newsegmentC sedans,dedicatedmainlyto urbanuse, are developedon the CommonModularPlatform(CMP),established in collaborationwith DongfengMotor Corporation.CMP, which was launched in 2018, has a fully electric version (eCMP) and offers an electricalternativefor all newmodelsreleasedstarting in 2019. This modular approach, coupled with programme-based organisation,will enable the reuse of basic parts and modulesbut also body parts, generatinga 20% savingon R&D costs and a 30% savingon capitalexpenditure(CAPEX)comparedto an entirelynew model.

Via its “CoreModel Strategy”,Groupe PSAoffers a targetedrange of technologiesthat aims to provide its customerswith a diverse selectionof technologicaloptions to meet all of their responsible and sustainablemobility needs, thus reflectingthe social changes that have a direct impact on the automotive industry: energy transition, increased urbanisation, the ageing of the population, digitaladvancesand hyper-connectivity, globalisation,mobilityand changes inhabits. Groupe PSAhas identified its R&D strategic focus areas through which it will offer its customers new types of automotive experience,tailoredto the individualtrends aroundthe world. The goalis todesignanddevelop: cars that are ever moreenvironmentally friendlyand supportthe n energy transition; intelligent, connected and autonomous cars to assist drivers n during the mostmonotonous moments of driving.

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GROUPE PSA - 2019 UNIVERSAL REGISTRATION DOCUMENT