PSA - 2019 Universal Registration Document

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

The transformationof R&D 4.5.4.4.1. and the performance plan

one R&D centre in Latin America , with 400 full-timeequivalent n employeesat end-2019,the “homebase”of Flexfuel enginesthat can run entirelyon biofuelsunique to the Latin Americaregion, and responsibility for derivativebodystyles,local integrationand manufacturing; one new centre in India , which opened in 2019 and had n 30 full-timeequivalent employeesat year end, and where the “smartcar”programmewillbe developed.

To meetcompetitiveness challenges,R&Dhas pledgedto achievea productivity gain of 5% per year, reinvested in Groupe PSA’s engineering.To do this, the Qualityand EngineeringDepartmentis leadinga performance plan, DRIVE . Managing major R&D transformationsin DRIVE helps generate annual savingsof around€150 millionper year by: improving design processes; n reducingtime tomarket; n speedingup therolloutof digitaltechnology; n minimising diversity andcomplexity; n developing efficient subcontracting; n establishingR&Dsitesandactivitiesaroundthe world,andmore. n Partnerships 4.5.4.4.2. To effectively deploy its roadmap to cutting-edgetechnologies, Groupe PSA leverages its internal know-how combined with strategic partnerships: the CMP platformand its electric eCMP version are developed n withDongfeng MotorCorp.underthe DCPA jointventure; when it comes to electrification,Groupe PSAis expanding its n expertise in the design and production of vital electrical components for electric powertrains through jointventures: Nidec-PSA e-motors, for the design and engineering and n manufacturing of electric machines, Punch Powertrain PSA e-transmissions, for the electric n transmission system (e-DCT), the ACC (AutomotiveCell Company) Project to develop a n batterymanufacturingbusinessfor electricvehiclesthrougha jointventurewithSaft, a subsidiary of the TotalGroup; in thefieldof connectivity, Groupe PSA has joined forces with: n Huaweito developits IoT CVMP (ConnectedVehicleModular n Platform), which corresponds to Cloud PSA, Qualcomm for the connected cockpits in 5G, Harman for n over-the-air infotainment post-2020.

RESPONSIBLE SKILLS 4.5.4.3. MANAGEMENT

Groupe PSA’sR&D needs to deliverthe productsand technologies outlined in the WorldwideMaster Plan by drawing on top-notch skills andat coststhat are competitive on theautomotive market. The managementof strategic skills (ADAS, electric powertrains, HMI/cockpit,infotainment,connectivity,electronic equipment)to match resources with technical challenges is based on several components: the expertise network, which at end-2010 included: 29 senior n experts, 219 expertsand 640 specialists,key competenciesfor Groupe PSAto continueto competeat the highestlevel globally andensurethe durability of its technologicalknow-how; internal retrainingto keep pace with changingjob families and n professions,changing business lines and the reorganisationof entities.Since 2013, around2,000 internalretrainingshave been deliveredin the Researchand DevelopmentDepartmentthrough

the “TopCompétences”programme; recruitment targeting strategic fields; n

the use of subcontracting in order to have flexibilitywhen faced n with changes in business volume and to cope with economic performance challenges; partnershipsto bolster us with top expertisein highly strategic n fields.

PERFORMANCE 4.5.4.4.

Improvingthe effectivenessof Groupe PSA’sR&D relies on three key factors: the development of our vehicles through multi-brand and n multi-region programmes, based on multi-energy modular platforms that help maximise the reuse of parts (see Section 4.5.1); an international presence that is more fully taking root (see n Section 4.5.4.2); the transformation of its R&D and a revolutionary internal n performance plan; strategicpartnershipsto buttressus with top expertisein highly n strategic fields.

167

GROUPE PSA - 2019 UNIVERSAL REGISTRATION DOCUMENT