PSA_GROUP_REGISTRATION_DOCUMENT_2017

ANALYSIS OF THE BUSINESS AND GROUP OPERATING RESULTS IN 2017 AND OUTLOOK Automotive Expertise to deliver useful technologies

THE “CORE TECHNOLOGY 4.5.1.2. STRATEGY”

experience, tailored to the individual user habits around the world; To design and develop: cars that are ever more environmentally friendly; „ connected, autonomous cars to assist drivers during the most „ monotonous moments of driving; attractive, pleasurable cars, that match the DNA of each of the „ Group’s three automotive brands. Given the increasing technological complexity of vehicles, the safety of the driver, the passengers and other road users remains at the very heart of the Groupe PSA’s work. The Group’s performance in this regard is presented in Section 2.3.2.

Via its “Core Model Strategy”, Groupe PSA offers a targeted range of technologies that aims to provide its customers with a diverse selection of technological options to meet all of their responsible and sustainable mobility needs, thus reflecting the social changes that have a direct impact on the automotive industry: energy transition, increased urbanisation, the ageing of the population, digital advances and hyper-connectivity, globalisation, mobility and changes in habits. Groupe PSA has therefore identified three R&D strategic focus areas through which it will offer all its customers new types of automotive

Groupe PSA technological response 4.5.2.

“CLEAN TECHNOLOGIES” 4.5.2.1. The transport industry affects the control of greenhouse gases emissions and air quality. For this reason, regulations are becoming stricter across the globe. Approximately 50% of the Groupe PSA’s R&D budget is dedicated to developing technologies to improve the environmental efficiency and performance of its vehicles. Concerned to adopt a sustainable mobility approach (see Section 2.1.2) and to meet the challenge of energy transition, the Group has made the “clean car” a strategic focus of its R&D. Thus, the performance of its internal-combustion and electrical powertrains can and will enable it to respond to the CO 2 issues, to reduce pollutant emissions and to accommodate the change in the petrol/diesel fuel mix at work in Europe, and particularly in France. Optimisation of internal combustion 4.5.2.1.1. engines Groupe PSA possesses a range of high-performing powertrains. Among petrol engines, the 3- and 4-cylinder PureTech family „ (formerly THP) is particularly efficient from the standpoint of consumption, weight and emissions. The 3-cylinder 1.2l turbo version received the International „ Engine of the Year award in its category for 3 consecutive years, from 2015 to 2017. The new generation of this engine range was launched in „ May 2017. Intended to conquer world markets, this range complies with the Euro 6d-temp standard (which came into force on 1 September 2017 for new vehicles) and, furthermore, with the more stringent Chinese China6b standard. Groupe PSA has also developed a particulate filter, the GPF (gasoline particle filter) for direct-injection petrol engines. As measured by number of particles filtered, this technology is 75% more efficient. Since end 2017, this development has been generalised to all Groupe PSA’s direct-injection petrol engines. The EC engine family rolled out across all regions completes this range of Groupe PSA petrol engines. For diesel engines, Groupe PSA has followed the most efficient „ technological options, rather than the least costly. Following the widespread use of the particulate filter since 2011, SCR technology (selective catalytic reduction), launched in 2013, is today widely used on all diesel Euro 6b BlueHDi engines. The new-generation 1.5 BlueHDi engines, launched in 2017, adheres to a real driving emissions (RDE) compliance factor of 1.5 instead of the required 2.1 for No x emissions, three years

ahead of the regulations. This is a compact engine, boasting an upgraded BlueHDi depollution system with enhanced No x treatment efficiency. Its design and engineering were 100% digital. In 2017, Groupe PSA also expanded its gearbox offer with a new „ 6-gear manual box developed using 100% digital engineering, and an 8-gear automatic box (EAT8), thereby achieving further, still more drastic vehicle consumption gains while offering the highest standard of driving comfort. Besides developing technologies of ever-increasing efficiency from the standpoint of consumption and emissions, Groupe PSA is committed to a policy approach of transparency to its customers regarding the true consumption of its vehicles. It partnered with the NGOs Transport & Environnement (T&E) and France Nature Environnement (FNE), and with the Bureau Veritas certification agency to define a reliable protocol for measuring Real-World fuel consumption. The measurements obtained through this protocol make it possible to estimate the consumption in real-world driving conditions of more than 1,000 versions of Peugeot, Citroën and DS vehicles. This initiative, a first in the automotive world, won the ECOBEST 2017 award. New electric powertrains 4.5.2.1.2 To respond to energy transition issues, Groupe PSA has committed itself to electrifying its vehicle range, with clear aims: from 2019 onwards, every new model produced will be available „ in an Electric or Hybrid version; by 2023, the electric offer will extend to 80% of vehicles in the „ “core model strategy”. In addition, the PACE! strategic plan affirms acceleration in the move of Opel and Vauxhall cars to electrical technology. Accordingly, 4 electric versions will be marketed by 2020 and, by 2024, all passenger cars of the Opel and Vauxhall brands will offer an electric version. The electric powertrains are developed on the EMP2 and CMP multi-energy platforms, enabling Groupe PSA to adapt flexibly to the energy mix required on the different markets. The plug-in petrol hybrid Groupe PSA is developing a plug-in full-hybrid powertrain coupled with a petrol engine developed on the EMP2 multi-energy modular platform. This technology will provide its customers with, among others, benchmark dynamic product performances, spacious passenger compartments and boot; a 60km (1) range full electric mode. The plug-in petrol hybrid range will be launched simultaneously in Europe and in China from 2019 with the DS7 Crossback.

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GROUPE PSA - 2017 REGISTRATION DOCUMENT