2008 annual report psa

Peugeot 207 front wing

Incorporated in France with issued capital of e234,048,798 Governed by a Managing Board and a Supervisory Board

Registered Office: 75, avenue de la Grande-Armée - 75116 Paris, France R.C.S. Paris B 552 100 554 – Siret 55 2 100 554 00021

Phone: + 33 (0)1 40 66 55 11 – Fax: + 33 (0)1 40 66 54 14

www.psa-peugeot-citroen.com – www.sustainability.psa-peugeot-citroen.com

Interior of the Citroën Hypnos

concept car

Milling a component of the Citroën Grand C4 Picasso mock-up

Peugeot Boxer taillight

2008SuStainable Development

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COVER PHOTOS

COVER PHOTO EXPLANATION

PSA PEUGEOT CITROËN / 2008 SuStainable Development anD annual RepoRt

largest carmaker in europe, with

13.8% of the market

manufacturer of light commercial vehicles in europe, with

19.9% of the market

2nd no.1vehicles sold worldwide

3,260,400

2_ Message from the Chairman of the Supervisory Board 4_ The Supervisory Board 6_ Interview with the Chairman of the Managing Board 8_ Executive Management 10_ Investor Relations 12_ Key Figures 14 - 19_ The Year’s Highlights

OUR AMBITION 22_ Fundamentals Driving Our Ambition 24 - 27_ Sustainable Development Approach

OUR BUSINESS 30 - 33_ Peugeot and Citroën 34_ 2008 Performance 36 - 40_ International Expansion 41 - 43_ Other Businesses

OUR COMMITMENT 46_ Translating Needs into Products 48 - 53_ Vehicles and the Environment 54 - 57_ Manufacturing and the Environment 58 - 67_ Social Responsibility 68 - 75_ Corporate Citizenship

OUR PERFORMANCE 78 - 83_ Financial Indicators 84 - 87_ Product Indicators 88_ Production Plant Environmental Indicators 90_ Employee Relations Indicators 92_ Production Facilities / Methodology

ContentS

Indicates PSA Peugeot Citroën’s 10 sustainable development objectives for 2008-2011.FCBA-COC-000057

available on the CD-Rom• The 2008 Sustainable Development Performance Indicators supplement

• The 2008 Registration Document, filed with the Autorité des Marchés Financiers on 24 April 2009, is available upon request from: Investor Relations – 75, avenue de la Grande-Armée – 75116 Paris, France

Phone: 0810 424 091 (France only, charged at local rate) – Email: [email protected]

• Notice of Meeting for the Annual Shareholders Meeting

Photos: Front cover: C-A. D’Autichamp – P. Legros – P. Ollive • p. 2: M. Moore • p. 5: M. Moore – N. Zwickel • p. 7: M. Moore • p. 9: M. Moore – P. Legros – S. Meyer – N. Zwickel – Corporate Communications, China – Corporate Communications, Brazil – D. Pizzalla • p. 14: S. Muratet – J. Lejeune – Corporate Communications, China • p. 15: N. Zwickel – S. Muratet – G. Ricciardi • p. 16: M. Moore – C-A. d’Autichamp – S. Meyer • p. 17: BMW – S. Meyer – J. Stehlin – Peugeot Motorsports • p. 18: J. Lejeune – P. Legros – M. Suning • p. 19: Citroën Motorsports – Boyko – L. Nivalle • p. 20/21: P. Sautelet • p. 22: P. Legros • p. 23: P. Sautelet • p. 24: S. Meyer – S. Muratet – N. Zwickel • p. 25: IVM • p. 28: J. Lejeune • p. 29: Corporate Communications, Citroën • p. 31: P. Sautelet – P. Legros • p. 32: Corporate Communications, Citroën • p. 33: J. Lejeune – Corporate Communications, Citroën • p. 35: S. Foulon • p. 36: J. Lopeteguy • p. 37: G. Ricciardi • p. 38: M. Suning • p. 39: L. Can-Yun – Corporate Communications, China • p. 40: F. Spilka • p. 41: Gefco • p. 42: P. Legros • p. 43: Faurecia • p. 44/45: L. Nivalle • p. 49: F. Pitchal – P. Legros • p. 50: J. Lejeune • p. 51: A. Bernier • p. 53: M. Ech Charqi – S. Meyer • p. 56: S. Meyer • p. 57: C. Pihery • p. 58: D. Pizzalla • p. 59: P. Legros • p. 60: N. Zwickel • p. 61: Corporate Communications, Trnava • p. 62: P. Legros • p. 63: J. Lejeune • p. 64: S. Meyer • p. 65: Corporate Communications, Metz • p. 66: R. Degoul • p. 67: N. Zwickel • p. 68: J. Lejeune • p. 69: J. Stehlin – P. Sautelet • p. 71: D. Pizzalla • p. 72: J. Lejeune • p. 73: J. Stehlin • p. 75: Corporate Communications, Poissy – J. Stehlin • p. 76: A. Bernier • p. 77: P. Sautelet • Back cover: C-A. D’Autichamp – P. Legros – S. Foulon.

Design: PSA Peugeot Citroën Corporate Communications. Creation, production and printing:

3,000 copies of this Sustainable Development and Annual Report have been printed on FSCTM-certified Creator Silk paper, made exclusively with fibres from responsibly managed forests. Vegetable-based inks made from renewable raw materials were used. The printer, which has earned both Imprim’Vert and FSCTM certification, has committed to taking continuous, tangible action to reduce harmful emissions, while saving natural resources.

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employees worldwide

201,700

PSA Peugeot Citroën is a world-class European automobile manufacturer whose two brands, Peugeot and Citroën, offer innovative, stylistically differentiated model line-ups. With marketing operations in 150 countries, the Group generates more than one third of its sales outside Western Europe. In addition to investments in France and the rest of Europe, it is actively expanding its production base near priority markets, with manufacturing facilities in Latin America, China and soon in Russia.

Over the years, the Group has gained a worldwide reputation for its environmental leadership. In 2008, it sold more than one million vehicles emitting less than 140 grams of CO2 per km for the third consecutive year. Road safety is also a major focus at PSA Peugeot Citroën, representing a significant portion of R&D spending. The Group’s human resources policy, based on social dialogue, is deployed in all host countries through a global agreement on social responsibility.

PSA Peugeot Citroën is also involved in financing, with Banque PSA Finance; transport and logistics, with Gefco; and automotive equipment, with Faurecia.

vehicles sold outside Western Europe

1 millionMore than

2 / OUR GROUP > MESSAGE FROM ThE ChAIRMAn OF ThE SuPERvISORy BOARD

MESSAGE FROM ThE ChAIRMAnOF ThE SuPERvISORy BOARD

Dear fellow shareholders,

PSA Peugeot Citroën’s performance in 2008 varied sharply from the first half to the second. In the first six months of the year, the Group developed its business in line with the objectives set by the Supervisory Board, i.e., return to growth, pursue international expansion and improve profitability. To meet these objectives, the entire organisation focused on actively deploying the CAP 2010 competitiveness plan.

This commitment drove improvement in several areas during the year, including: - An increased international presence, with the confirmation of a new plant in Kaluga, Russia, the signature of a related agreement with Mitsubishi, and the introduction of dedicated models (such as the Peugeot 207 Mercosur) in our strategic markets.- A busy launch schedule, with the introduction of new versions of the Peugeot 308 and the new Citroën C5 – two models that are widely recognised for their unsurpassed quality. - The sustained renewal and broadening of the light commercial vehicle line-up, with the new Partner/Berlingo and Bipper/Nemo.- The extension of the Lean Everywhere management process from manufacturing to every aspect of our business, which has increased cost savings and improved profitability. The Group ended the first half with worldwide sales up 4.6% and an operating margin of 3.7%.

In the second half, the economic and financial crisis caused demand to collapse in automobile markets around the world, leading to a substantial decline in the Group’s final-quarter sales. In response to this steep downturn, the Managing Board redefined the Group’s operating priorities with stepped-up deployment of cost-cutting measures outlined in the CAP 2010 competitiveness plan and extremely disciplined management of the Group’s cash and cash equivalents. Lastly, the Group decided to reduce massively global production in the fourth quarter, by 26% from the year-earlier period, to align output with demand and bring down inventories as quickly as possible. This had a major impact on the Group’s financial position.

{{The Supervisory Board has instructed the new Managing Board to deploy all of the resources the Group needs to weather the current economic crisis, while retaining its capacity for growth, in line with the long-term strategic vision defined by the Supervisory Board.”

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Over the full year, worldwide sales of assembled and CKD vehicles declined by 4.9% to 3,260,400 units. Recurring operating income contracted to €550 million, or 1% of sales and revenue, from €1,752 million and 3% in 2007. Nonrecurring operating expense amounted to €917 million. The net loss attributable to equity holders of the parent came to €343 million for the year.

On the positive side, however, the CAP 2010 plan resulted in total cost savings of €1.4 billion. The Group also maintained its European market share at 13.8% and confirmed its position as an environmental leader, selling close to 1.2 million vehicles emitting less than 140 grams of CO2 per km worldwide. Lastly, PSA Peugeot Citroën strengthened its leadership in the European light commercial vehicle market, with a 19.9% share.

Today, at a time when forecasts point to prolonged weakness in automobile sales in most of the major markets, the Supervisory Board is more than ever committed to maintaining the Group’s vision of becoming one of the world’s leading automobile companies. In addition to the financial measures demanded by the crisis, we have asked the Managing Board to pursue the automobile projects already underway, maintain the product plan and continue expanding the Group’s global footprint. In light of 2008’s results and the priority need to allocate financial resources to supporting the product plan, driving business development and strengthening the Group’s cash position, shareholders at the Annual Meeting on 3 June 2009 were asked to waive the payment of a dividend with respect to 2008.

The Supervisory Board also felt it necessary to strengthen the Group’s executive management. On 29 March 2009, it decided to remove Christian Streiff as member and Chairman of the Managing Board. This grave, serious, and important decision reflected the opinion of the Supervisory Board members that, without calling the announced strategy or CAP 2010 plan into question, the Managing Board needed a change of leadership. Philippe Varin, who became

Chairman of the Managing Board effective 1 June 2009, has exercised global senior executive responsibilities in manufacturing companies, including during periods of recession. This is why the Board felt that he had the skills to deploy diligently and assertively all of the resources the Group needs to weather the crisis, while retaining its capacity for growth, in line with the long-term strategic vision defined by the Supervisory Board. The Board would like to take this opportunity to express its deep thanks to Roland Vardanega for serving as Chairman pro tempore through 31 May 2009.

2009 will be a difficult year. That said, PSA Peugeot Citroën can count on solid strengths to help it navigate the weak economy and deeply shaken automobile markets, starting with the broad, modern and environmentally-friendly Peugeot and Citroën model line-ups. The Group will launch several new models during the year, including the Citroën C3 Picasso and Peugeot 3008, to ensure that the right models are available in all markets to meet customer expectations. It will also be supported by a strong new leadership team with the determination to bring PSA Peugeot Citroën through the crisis in good shape while preparing its future as one of the first global carmakers to return to growth and profitability.

ThieRRy PeUGeOT/ ChAIRMAn OF ThE SuPERvISORy BOARD

PSA PeUGeOT CiTROËN / 2008 SuSTAInABLE DEvELOPMEnT AnD AnnuAL REPORT

4 / OUR GROUP > ThE SuPERvISORy BOARD

ThE SuPERvISORy BOARD

Since 1972, Peugeot S.A. has had a two-tier management structure comprising a Managing Board, responsible for strategic and operational management, and a Supervisory Board, responsible for oversight and control. This separation is especially effective in addressing the concern for a balance of power between the executive and oversight functions, as reflected in the principles of good corporate governance.

MissionThe Supervisory Board appoints the members of the Managing Board and oversees the Managing Board’s management of the company. The Supervisory Board also has authority to remove members of the Managing Board from office and to approve capital increases and decreases, bond issues, the signature or termination of agreements with other companies operating in the same industry that will have a decisive impact on the Group’s future development, and any major transaction that substantially alters the business or financial structure of the Company or the Group. Lastly, the Supervisory Board ensures that the strategy implemented by the Managing Board is consistent with the Group’s long-term vision, as defined by the Supervisory Board. The Supervisory Board meets at least once every quarter; the agenda of each meeting is prepared by the Chairman.

MembersThe Supervisory Board has twelve members plus two non-voting advisors, all of whom are elected by shareholders for six-year terms.

Supervisory Board Meetings in 2008The Supervisory Board met five times in 2008, with an average attendance rate of 98%. In February 2008, the Supervisory Board conducted a new self-assessment of its procedures and structure, which found that the quality of discussions during the meetings and the members’ knowledge of the Group had all improved. The number of meetings was set at five per year. The self-assessment also noted the members’ interest in examining subjects concerning strategic or long-term issues in greater depth. Lastly, knowledge of the Group has been further improved by presentations on specific topics by members of the Managing Board or senior executives and by meetings with line managers during on-site visits.

The Supervisory Board has decided to adopt the AFEP-MEDEF Corporate Governance Code, as applicable to French joint-stock companies with a Supervisory Board and Managing Board.

Committees of the BoardThe Supervisory Board has created three specialised committees: the Strategy Committee, the Compensation and Appointments Committee and the Finance Committee. The role of these Committees is to analyse and prepare certain matters to be discussed at Supervisory Board Meetings.

- The Strategy Committee comprises seven members who are appointed in a personal capacity and may not be represented by another party: Jean-Philippe Peugeot, Chairman; Jean-Paul Parayre; Robert Peugeot; Thierry Peugeot; Henri-Philippe Reichstul; Ernest-Antoine Seillière and Jean-Louis Silvant. The Strategy Committee met four times in 2008, mainly to discuss the Group’s automobile product plan, its strategy in China, Gefco’s growth strategy and the main objectives set in response to the financial and economic crisis.

- The Compensation and Appointments Committee comprises four members who are appointed in a personal capacity and may not be represented by another party: Thierry Peugeot, Chairman; Jean-Philippe Peugeot; Ernest-Antoine Seillière and Jean-Louis Silvant. The Compensation and Appointments Committee met six times in 2008, notably to discuss the salary and bonuses of Managing Board members as well as the granting of stock options to Managing Board members. In addition, the Committee was informed of the succession plans for key executives and examined the recommendations issued by AFEP-MEDEF on 6 October 2008, which it advised the Supervisory Board to adopt.

- The Finance Committee comprises five members who are appointed in a personal capacity and may not be represented by another party: Jean-Paul Parayre, Chairman; Marc Friedel; Jean-Louis Masurel; Robert Peugeot and Marie-Hélène Roncoroni. The Finance Committee met six times in 2008. At each meeting, it reviewed the management reporting indicators.

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The Auditors and the Chief Financial Officer attended the meetings held to review the 2007 financial statements and the 2008 interim financial statements. During the last quarter of the year, the Committee carefully monitored the cash position and financing of the manufacturing and sales companies and of Banque PSA Finance. It also devoted a specific meeting to examining the Group’s internal audit plan and to tracking the action plans implemented following the fraud at Banque

PSA Finance in 2007. The Committee carefully reviewed measures to enhance Banque PSA Finance’s internal control system. At its meeting on 6 February 2009 – which was attended by the Auditors – the Finance Committee reviewed (i) the 2008 financial statements of the Company and the Group, prior to their presentation to the Supervisory Board on 10 February 2009, (ii) Faurecia’s financial position, and (iii) the financing measures being negotiated with the French government and banks.

1_ Thierry Peugeot, Chairman 2_ Jean-Philippe Peugeot, Vice-Chairman 3_ Jean-Louis Silvant, Vice-Chairman 4_ Marc Friedel 5_ Jean-Louis Masurel 6_ Jean-Paul Parayre 7_ Robert Peugeot 8_ Geoffroy Roux de Bézieux 9_ Marie-Hélène Roncoroni 10_ Henri-Philippe Reichstul 11_ Ernest-Antoine Seillière 12_ Joseph F. Toot Jr. 13_ Roland Peugeot, Advisor 14_ François Michelin, Advisor

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10 11 12

13 14

Bertrand Peugeot, 1923-2009

In memoriam – Bertrand PeugeotBertrand Peugeot, non-voting advisor of the Supervisory Board, passed away on 14 February 2009. Born in 1923, Bertrand Peugeot was involved in the creation of PSA Peugeot Citroën in 1976. He held various positions as Chairman or Director of Group companies, including Chairman of Cycles Peugeot (later ECIA) and Peugeot Motocycles. Mr. Peugeot was Vice Chairman of the Supervisory Board from 1972 to 1999.


6 / OUR GROUP > InTERvIEW WITh ThE ChAIRMAn OF ThE MAnAGInG BOARD

InTERvIEW WITh ThE ChAIRMAn OF ThE MAnAGInG BOARD

Philippe Varin joined PSA Peugeot Citroën on 15 April 2009 and became Chairman of the Managing Board on 1 June. He shares his first impressions with us below.

You have just arrived at the head of the Group. How do you see this new challenge?I am very pleased and proud to have been chosen to lead PSA Peugeot Citroën, even though I am fully aware of the challenges facing us. I’ve worked for 31 years in industry – first in aluminium and then in steel – in international environments and often during times of crisis. I’m excited about putting my experience as an engineer and executive to use here at PSA Peugeot Citroën.

What is your view of the Group at present?In these first few weeks, I’ve been able to visit a number of manufacturing and technical sites, R&D centres and sales outlets. This has given me the opportunity to meet our team members and identify the Group’s main strengths. I’ve also met with employee representatives. These initial contacts have confirmed my opinion that PSA Peugeot Citroën should aim to rank among the leading global carmakers by leveraging its immense technical and technological potential, skilled teams and projects underway to improve organisation and efficiency. That said, the Group has obviously run into turbulence. The global economic crisis has hit us hard, particularly as concerns our cash position. That’s why my first priority will be to achieve a healthier balance sheet. We will do everything we can to remove the constraints that are limiting our room for manoeuvre. I’ve asked our teams to remain focused on the targets set by our CAP 2010 plan, especially in terms of cost cutting. This will not be enough in itself, but it will be indispensable nonetheless.

And in the medium term?I think it’s crucial for us to have an ambitious vision here at PSA Peugeot Citroën. It’s my job to carefully define this vision with the management team so that it can be translated into tangible objectives for Group-wide buy-in and deployment. PSA Peugeot Citroën also has to become more

global, not only in its geographic presence but also in the make-up of its teams, because diverse ways of thinking and looking at things are what will drive our strategy and ability to innovate, and ultimately allow us to meet our markets’ specific needs. Lastly, in addition to our passion for automobile technology and our products, we need to develop our customer service. Clearly, we need to be able to respond very quickly to new demands, but even more important, we need to be able to anticipate them. With this forward-looking approach, we will constantly track changes in society, lifestyles, consumption and mobility to prepare the solutions of the future. In short, we want to have the right product ready for the market at the right time.

What’s your analysis of the economic crisis?Because car manufacturing requires huge investments and entails high fixed costs, the recession is hitting the automobile industry much harder than others. What’s more, cars are a large expenditure item that consumers can put off buying. The consequences of this crisis are substantial, because the entire industry is affected. That’s why all of us, from carmakers to suppliers, need to find solutions. Unfortunately, I’m afraid that it will take several years to return to the kinds of sales numbers we saw in 2008 in the developed countries. On the other hand, the market will continue to grow in emerging economies where we need to expand our presence. The economic crisis is also creating fundamental changes that will impact our markets over the long term. Consumers have new expectations when it comes to prices, and they are increasingly concerned about environmental issues.

Speaking of the environment, there is a huge focus in our society today on the automobile. Clearly, climate change is a major challenge for the automobile industry. PSA Peugeot Citroën is Europe’s leading manufacturer of low CO2 emission vehicles, and that’s a strength for us as we move forward. We need to maintain our focus and pursue our work in this area to enhance our position in increasingly competitive markets. We will be at the cutting edge of “post-oil” products and solutions to meet our customers’ needs.

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Is PSA Peugeot Citroën well equipped to weather the crisis? I have absolutely no doubts that the Group will be able to emerge from the crisis even stronger than before-otherwise I wouldn’t have accepted this job. But to achieve this ambition, we’ll first have to make it through the crisis, restore our financial leeway and ask ourselves the right strategic questions.

How do you intend to motivate your workforce? I believe in management based on respect, two-way communication and trust. For me, it’s extremely important that all our team members share in our vision for the future and that this vision has meaning. Our teams love what they do and they have exceptional skills. They need to know, in practical terms, what they can do to make PSA Peugeot Citroën a success. We will set ambitious targets, based on continuous benchmarking, and I will report on the results regularly, both in-house and in public.

PhiliPPe vARiN/ ChAIRMAn OF ThE MAnAGInG BOARD

{{PSA Peugeot Citroën should aim to rank among the leading global carmakers by leveraging its immense technical and technological potential, skilled teams and projects underway to improve organisation and efficiency.”


8 / OUR GROUP > ExECuTIvE MAnAGEMEnT

Managing BoardThe Managing Board is responsible for executive leadership and financial management, helping to define and implement the Group’s strategic vision and defining Group policies. It decides among the various courses of action and allocates the appropriate resources. In 2008, the Managing Board was comprised of Christian Streiff, Chairman; Grégoire Olivier (Programmes); Jean-Philippe Collin (Peugeot); Gilles Michel (Citroën)* and Roland Vardanega (Manufacturing and Components). Managing Board members are appointed by the Supervisory Board for four-year terms. They may be removed from office by the Supervisory Board pursuant to the Company’s bylaws, or by shareholders in a General Meeting, in accordance with French company law.

On 29 March 2009, the Supervisory Board removed Christian Streiff from office as member and Chairman of the Managing Board and appointed Philippe Varin Chairman of the Management Board effective 1 June 2009. Roland Vardanega, who is already a member of the Managing Board, was appointed Chairman pro tempore for the period from 29 March to 31 May 2009. At its meeting of 21 April 2009, the Supervisory Board appointed Jean-Marc Gales member of the Managing Board and Executive Vice-President, Citroën Brand.

Other Members of the Executive CommitteeThe Executive Committee includes the members of the Managing Board plus Frédéric Saint-Geours (Advisor to the Chairman), Isabel Marey-Semper (Finance and Strategy), Denis Martin (Human Resources), Jean-Claude Hanus (Legal Affairs, Institutional Relations and Internal Audit) and Liliane Lacourt (Corporate Communications). As of 30 April 2009, the Expanded Executive Committee also included Claude Vajsman (China), Vincent Rambaud (Latin America), Jean-Christophe Quémard (Purchasing), Daniel Marteau (Replacement Parts), Alain Sartoris (Executive Development and Information Technology) and Pascal Henault (Automobile Research and Innovation), who each report directly to the Chairman of the Managing Board.

* Member of the Managing Board until 31 December 2008.

ExECuTIvE MAnAGEMEnT

1_ Philippe Varin 2_ Grégoire Olivier 3_ Roland Vardanega 4_ Jean-Philippe Collin 5_ Jean-Marc Gales 6_ Frédéric Saint-Geours 7_ Isabel Marey-Semper 8_ Denis Martin 9_ Jean-Claude Hanus10_ Liliane Lacourt 11_ Claude Vajsman 12_ Vincent Rambaud13_ Jean-Christophe Quémard 14_ Daniel Marteau 15_ Alain Sartoris 16_ Pascal Henault

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10 / OUR GROUP > InvESTOR RELATIOnS

InvESTOR RELATIOnS

More than ever, transparent communication with all shareholders – be they French or for-eign, individual or institutional – is a priority for PSA Peugeot Citroën. As a result, the Group provides regular information through appropri-ate channels and organises meetings and events to nurture direct relations.

A commitment to permanent dialogue–PSA Peugeot Citroën’s investor relations team keeps in close contact with shareholders and the financial community throughout the year in order to present the different facets of the Group’s busi-ness, as well as its strengths and challenges, with the goal of fostering mutual understanding and a relationship of trust. In addition to results presenta-tions and the Annual Meeting, institutional investors and financial analysts in Europe, the United States and Asia have the opportunity to attend meetings on targeted topics. The investor relations team also participates in various conferences.

PSA Peugeot Citroën organises meetings outside the Paris area to meet with individual investors and present the Group and its strategy. Plant tours, such as the 2008 visit to Sevelnord for individual

investors and the Poissy visit for institutional inves-tors, are another way to showcase the Group’s manufacturing performance. In the same vein, the Group was able to highlight advances in its prod-uct strategy with an exclusive presentation of the Citroën C3 Picasso for financial analysts at the C42 showroom on the Champs-Élysées.

Individual investors can reach the investor relations team 24/7 at [email protected]. A toll-free number has also been set up for calls originating from a lanoline in France.

In-depth, easily accessible information–PSA Peugeot Citroën is particularly attentive to the quality, transparency and accessibility of its financial information. Individual shareholders, institutional investors and financial analysts can access a broad range of documents on the Group’s regularly updated website. Files avail-able for downloading include the Sustainable Development and Annual Report, the Registration Document, press releases and letters to share-holders. Additional information on the Group’s sustainable development approach is posted on a dedicated site.

IN 2008A toll-free number was created to provide continuous information for individual shareholders and Société Générale became Peugeot S.A.’s registrar as part of a rationalisation process.

Investor Relations: Toll-free number for calls originating from a lanoline in France

0 800 424 091

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SHARE DATA – ISIN: FR0000121501

Listing: Eurolist continuous trading – NYSE Euronext Paris, Compartment ABloomberg ticker: UG FP

Other markets:• United States: Traded as American Depositary Receipts (ADRs) on OTCQX (ticker PEUGY US), with one ADR representing one share of common stock• Europe: Listed on Euronext Brussels and SEAQ International – London

Listed in the major indexes:• Euronext and Sector: CAC 40, SBF 120, SBF 250, Euronext 100, Dow Jones Euro Stoxx Auto

• Socially responsible investing: ASPI Eurozone, FTSE4Good, FTSE4Good Environmental Leaders Europe 40 Index®, Ethibel Sustainability Indices (ESI)

Eligible for: Deferred settlement under the SDR system and inclusion in French PEA stock savings plans

Closing price on 31 December 2008: €12.15

Market value at 31 December 2008: €2.84 billion

Weighting in the CAC 40 index at 31 December 2008: 0.36%

CONTACT INFORMATION – Shareholders wishing to receive financial information on a regular basis may register at Company headquarters: Peugeot S.A. Investor Relations 75, avenue de la Grande-Armée 75116 Paris, France E-mail: [email protected] Relations: Toll-free number for calls originating from a lanoline in France

2009 INVESTOR CALENDAR – 3 June: Annual Shareholders’ Meeting29 July: First-half 2009 results21 October: Nine-month sales and revenue

PERfoRmANcE of THE PEugEoT S.A. SHARE VERSuS THE cAc 40 INDEx AND THE DJ EuRo SToxx AuTo INDEx (31 Dec. 2007 – 31 March 2009) –

20

40

60

80

100

120

20J F M A M J J A S

40

60

80

100

120

2008J F M A M J J A S O N D J F M A

2008 2009

Peugeot S.A. shareBasis 100 CAC 40 DJ Euro Stoxx Automobile

Other individual shareholders 4.89%

SHAREHoLDER BASE (at 31 December 2008) –

Other individual shareholders

6.09%

Employees2.76%

Peugeot family 30.30%

BNP Paribas 1.13%

Other French institutions 23.66%

Barclays Plc (total holding) 2.38%

Other foreign institutions 30.61%

Treasury stock 3.07%

ExERcISABLE VoTINg RIgHTS, BY SHAREHoLDER (at 31 December 2008) –

Peugeot family 45.10%

Other foreign institutions 24.01%

BNP Paribas 1.77%

Employees3.80%

Other French institutions 18.56%

Barclays Plc (total holding) 1.87%

DIVIDEND PER SHARE (in euros) –

2006 2007 2008

Net 1.35 1.50 0

In light of 2008’s results and the priority need to allocate financial resources to supporting the product plan, driving business development and strengthening the Group’s cash position, shareholders at the Annual Meeting on 3 June 2009 were asked to waive the payment of a dividend with respect to 2008.

0 800 424 091


12 / OUR GROUP > KEy FIGuRES

KEy FIGuRES

WoRLDWIDE SALES IN 2008(BY REGION) –

PSA Peugeot Citroën’s performance in 2008 varied sharply from the first half to the second:- In the first six months, worldwide sales rose 4.6% and operating margin widened to 3.7%.- The second half was shaped by collapsing demand and rising inventories. In response, PSA Peugeot Citroën massively reduced

output in the fourth quarter and focused on drawing down inde-pendent dealer network inventory. These two measures had a very negative impact on profitability. This led the Group to launch new restructuring plans in both the Automobile Division and at Faurecia, resulting in nonrecurring operating expense of €917 million.

CAP 2010 COMPETITIVENESS PLAN–• 180 projects launched since 2007,

of which one-third already implemented• €1.4 billion in savings in 2008• Warranty costs down 42% in 2008 compared with 2006

3,260,400vehicles sold worldwide (down 4.9%)

2,079,100in Western Europe

120,900in Africa and the Middle East plus 300,200 vehicles assembled in Iran

263,300in Latin America

263,300in Central and Eastern Europe and Russia

202,600in Asia Pacific

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R&D centres4 test

centres2 2 design centres

AuTomoBILE DIVISIoN cAPITAL ExPENDITuRE AND R&D ExPENSE (IN € MILLIONS) –

71,8

00

73,5

00

129,

900

134,

300

2007 2008

207,800 201,700

2007

3,515

2,079

2008

2,3802,156

12,7

13

13,1

57

41,6

43

45,5

19

2007 2008

58,67654,356

2007

2008

885

(343)

2007 2008

3,5073,816

E�ectifs Chi�res d’a�airesRésultat net partdu groupe

Dépenses de R&Det investissementsde l’activité automobile

Marge brute d’auto�nancementet investissements (hors R&D)

NumBER of EmPLoYEES (AS OF 31 DECEMBER) –

REVENuES(IN € MILLIONS) –

71,8

00

73,5

00

129,

900

134,

300

2007 2008

207,800 201,700

2007

3,515

2,079

2008

2,3802,156

12,7

13

13,1

57

41,6

43

45,5

19

2007 2008

58,67654,356

2007

2008

885

(343)

2007 2008

3,5073,816




PRofIT/(LoSS) ATTRIBuTABLE To EQuITY HoLDERS of THE PARENT (IN € MILLIONS) –

71,8

00

73,5

00

129,

900

134,

300

2007 2008

207,800 201,700

2007

3,515

2,079

2008

2,3802,156

12,7

13

13,1

57

41,6

43

45,5

19

2007 2008

58,67654,356

2007

2008

885

(343)

2007 2008

3,5073,816




71,8

00

73,5

00

129,

900

134,

300

2007 2008

207,800 201,700

2007

3,515

2,079

2008

2,3802,156

12,7

13

13,1

57

41,6

43

45,5

19

2007 2008

58,67654,356

2007

2008

885

(343)

2007 2008

3,5073,816




n Automobile Divisionn Other Businesses

n Automobile Divisionn Other Businesses

WoRKINg cAPITAL PRoVIDED BY oPERATIoNS AND cAPITAL ExPENDITuRE (ExcLuDINg R&D)(manufacturing and sales companies)(IN € MILLIONS) –

71,8

00

73,5

00

129,

900

134,

300

2007 2008

207,800 201,700

2007

3,515

2,079

2008

2,3802,156

12,7

13

13,1

57

41,6

43

45,5

19

2007 2008

58,67654,356

2007

2008

885

(343)

2007 2008

3,5073,816




n Working capital provided by operationsn Capital expenditure (excluding R&D)

REcuRRINg oPERATINg INcomE(IN € MILLIONS) –

2007 2008

Automobile Division 858 (225)Other Businesses 894 775

Total PSA Peugeot Citroën 1,752 550

BALANcE SHEET STRucTuRE (IN € MILLIONS) –

2007 2008

Equity 14,555 13,277Net financial position of the manufacturing and sales companies 1,404 (2,906)

WoRLDWIDE SALES of LoW co2 EmISSIoN VEHIcLES –

2008 Sales

Vehicles emitting less than 140 grams of CO2 per km 1,161,000

Vehicles emitting less than 130 grams of CO2 per km 921,000

Vehicles emitting less than 120 grams of CO2 per km 673,000


14 / OUR GROUP > ThE yEAR’S hIGhLIGhTS

Peugeot and Citroën Models & Launches

In May 2008, Peugeot launched the extremely driveable 308 SW, with its spacious, bright interior. It also announced that a sporty concept car, which has been well received in the European media, will go into production. Introduced in March 2009, the new 308 coupé-cabriolet has inherited the exceptional handling that earned the Peugeot 308 Germany’s prestigious “Golden Steering Wheel” award.

The Peugeot 308 family keeps growing

NEW CITROËNC3 PiCASSO SPACe BOX–Unveiled at the 2008 Paris Motor Show, the C3 Picasso has now arrived in showrooms. This new generation MPV packs a spacious interior in a small package. The highly modular, fuel-efficient C3 Picasso is destined to transform its segment, as did the C4 Picasso and Grand C4 Picasso before it, becoming the best-selling MPVs in Europe in 2008. In March 2009, Citroën presented a C3 Picasso concept car with the latest version of the Stop & Start System, an electronic gearbox and an emissions level of just 110 grams of CO2 per km. models launched in China

Four new Peugeot and Citroën models rolled off the line at the Wuhan plant in 2008. Peugeot brought the 307 hatchback and 207 notch back to the Chinese market while Citroën added its new C-Élysée and C-Quatre. In addition, Peugeot began importing the 207 cc and Citroën the Grand C4 Picasso to meet Chinese demand for distinctive automobiles. Both are benchmark models in their respective segments.

6

/ 15

LEISURE ACTIVITY AND COMMERCIAL VEHICLES NeW GeNeRATiON BeRliNGO AND PARTNeR –More than 3.5 million Citroën Berlingos and Peugeot Partners have rolled of the line since 1996, and the vehicles are as popular as ever. In 2008, a new generation was introduced integrating the strengths of the earlier models –

multifunctional, robust and easy- to-use – while offering greater comfort and roominess. The previous generation models remain in the catalogue as the Berlingo First and the Partner Origin.

The CiTROËN C5 AND C5 TOUReR, lAUNCheD iN MARCh AND APRil 2008, HAVE RECEIVED NUMEROUS AWARDS. THE C5, IN PARTICULAR, WAS VOTED IMPORT CAR OF THE YEAR IN GERMANY AND JAPAN.

1 millionPeugeot 107s, Citroën C1s and Toyota Aygos have already been produced at the shared Toyota/PSA Peugeot Citroën TPCA plant in the Czech Republic. These compact models, which were restyled in 2008, emit only 106 grams of CO2 per km.

LATIN AMERICAiNTRODUCTiON OF The 207 RANGe – In 2008, Peugeot introduced three-door, five-door, SW and notch back versions of the 207 Mercosur. The entire range is manufactured at the PSA Peugeot Citroën plants in Buenos Aires, Argentina and Porto Real, Brazil.

PEUGEOT LAUNCHED The 3008, ITS FIRST COMPACT BUT SPACiOUS CROSSOveR FITTED WITH EXCLUSIVE TECHNOLOGIES LIKE THE NEW TRACTION ENHANCING GRIP CONTROL SYSTEM.

Citroën Nemo and Peugeot Bipper voted “van of the year”The Citroën Nemo and Peugeot Bipper won the prestigious “International Van of the Year” award for 2009 at the 62nd International Commercial Vehicles Show in Hanover, Germany.



The Group has introduced its HYbrid4 diesel hybrid technology to the public with the Citroën Hypnos and Peugeot Prologue concept cars. The vehicle takes advantage of the HDi diesel engine’s fuel efficiency on the open road and the electric power train’s benefits

in city driving. It also adds all-wheel drive capability thanks to an electric motor mounted on the rear axle assembly. The hybrid solution will be available in 2011 on premium Peugeot and Citroën models that will offer significantly lower fuel consumption and CO2 emissions.

DIESEL HYBRIDS

hybrid4 unveiled at the Paris Motor Show

innovation & Technologies

in March 2009, PSA Peugeot Citroën and Mitsubishi signed a memorandum of understanding to collaborate on an electric vehicle for the European market based on the Mitsubishi i-MiEv. The vehicle will be marketed by Peugeot at the end of 2010.

PETROL ENGINES DevelOPMeNT OF A COMPACT, eFFiCieNT 1 l eNGiNe–The Group has announced the development of a new family of three-cylinder, 1-litre, 70 to 100 hp petrol engines that will significantly reduce fuel consumption and CO2 emissions. In fact, emissions will fall below 100 grams per km with no additional technology. A new production unit for these engines, located at the Trémery plant in France, will be operational in 2011.

/ 17

TELEMATICS SERVICES

FOR OPTiMiSeD FleeT MANAGeMeNT– Peugeot and Citroën have launched a new remote fleet management service called Active Fleet Data. The service’s interp@rc software provides fleet managers with general information and mechanical updates twice a week and immediately sends an e-mail in the event of mechanical problems or safety alerts.

ENDURANCE 908 hy: A NeW SeCReT WeAPON–In 2008, Peugeot Sport presented the 908 HY demonstrator with a kinetic energy recovery system (KERS) at the finale of the Le Mans Series at Silverstone. The 908 HY

points to what could be the brand’s next secret weapon in endurance racing. Peugeot will enter a particulate filter-equipped 908 HDi in the 2009 Le Mans race.

million Peugeots and Citroëns equippedIntroduced by PSA Peugeot Citroën in 2000, the particulate filter set a new standard for diesel engines in Europe. Today, 22 of the Group’s vehicle families are equipped with the particulate filter, for one of the broadest deployment levels among European carmakers.3

France’s leading filer of patentsWith 961 patent applications in 2008, PSA Peugeot Citroën was France’s leading patent filer for the second year in a row. Most concerned improvements to petrol and diesel engines, the deployment of electric and hybrid technologies and road safety. The Group devoted €2.1 billion to R&D in 2008.

FOR THE SECOND YEAR IN A ROW, THE THP 1.6-LITER PETROL ENGINE WAS VOTED “iNTeRNATiONAl eNGiNe OF The yeAR” IN THE 1.4 TO 1.8 LITRE CATEGORY.

Particulate filter



Citroën’s new corporate identity:Créative TechnologieFor its 90th anniversary, Citroën has started a new page in its history. The brand’s image has undergone an in-depth transformation as Citroën highlights its creativity and ability to innovate. The change is embodied in a new visual identity; a logo with free-flowing, three-dimensional chevrons; a new signature (“Créative Technologie”) and a new

approach to the customer relationship. In keeping with this spirit, Citroën has also launched a new line of distinctive models known as “DS” for Different Spirit. The DS3 will be the first to hit the market, in early 2010, followed by the DS4 and DS5. These vehicles stem directly from work conducted under the CAP 2010 plan.

2million saplings have been planted over the last ten years in the carbon sink developed by Peugeot and France’s national forest service, OnF, in the Amazon basin. The 2,000 hectares replanted with local species have already sequestered 51,000 metric tons of CO2. This life-size laboratory is enabling scientists to verify the relationship between reforestation, carbon capture and climate change.

Diversity label In early 2009, PSA Peugeot Citroën became one of the first companies in France to obtain the government’s new Diversity Label in recognition of the Group’s policies to foster equal opportunity and prevent discrimination.

DRIVING PLEASURENeW 6-SPeeD GeARBOX– In April 2008, the Valenciennes plant began producing a new compact 6-speed manual gearbox, first offered on the Peugeot 308. The gearbox combines driving pleasure with lower fuel consumption and fewer greenhouse gas emissions.

IN OCTOBER 2008, PSA PEUGEOT CITROËN OPENED ITS ChiNA TeCh CeNTRe iN ShANGhAi. WITH THIS NEW ENGINEERING AND DESIGN CENTRE, THE GROUP WILL BE ABLE TO DEVELOP PEUGEOT AND CITROËN VEHICLES LOCALLY THAT ARE ALIGNED WITH CHINESE CUSTOMERS’ EXPECTATIONS.

The Group & its Brands

/ 19

ANNIVERSARYviGO PlANT TURNS 50– In 1958, the Vigo, Spain plant manufactured 400 Citroën 2CV AZUs. In the 50 years since then, nine million vehicles have rolled off the plant’s lines. The King Juan Carlos of Spain attended the 50th anniversary celebrations on 15 July 2008 along with his wife, Queen Sofia, and Thierry Peugeot, Chairman of the Supervisory Board. PSA Peugeot Citroën is a major player in the local economy, ranking as the leading enterprise in the Galicia autonomous region.

In April 2009, PSA Peugeot Citroën participated in the Planète Durable sustainable development show in Paris for the second year in a row. The Group presented a Peugeot 207 that emits just

99 grams of CO2 per km to illustrate the effectiveness of its work on conventional power trains. It also spotlighted the Citroën C-Cactus concept car with an electric motor and an “eco-driving” simulator.

PSA Peugeot Citroën at the Planète Durable show

iN JUNe 2008, OSAMU MASUKO,

PRESIDENT OF MITSUBISHI MOTORS,

THIERRY PEUGEOT, CHAIRMAN OF THE

SUPERVISORY BOARD OF PSA PEUGEOT

CITROËN, ROLAND VARDANEGA,

EXECUTIVE VP MANUFACTURING

AND COMPONENTS, AND ANATOLY

ARTAMANOV, GOVERNOR

OF THE KALUGA REGION lAiD The CORNeRSTONe FOR The JOiNT MiTSUBiShi/PSA PeUGeOT CiTROËN PlANT iN KAlUGA, RUSSiA.

In response to the financial and economic crisis that has battered the automobile industry, the Central Works Council met at a special meeting in December 2008 to consider the proposed redeployment of jobs and capabilities in the Automobile Division in France. The plan covers 3,550 non-production staff at all sites and in all

departments and includes incentive measures based on voluntary separation. This primarily involves accelerating departures that were scheduled for the coming months or years, by offering retirement with full benefits, business-creation support, career-reorientation leave and other solutions.

New voluntary separation plan

WiTh 11 viCTORieS iN 2008, SÉBASTieN lOeB AND DANiel eleNA WON THE DRIVER AND CO-DRIVER

CATEGORIES IN THE FIA WORLD RALLY CHAMPIONSHIP

FOR THE FIFTH YEAR IN A ROW. CITROËN ONCE AGAIN

SECURED THE MANUFACTURER’S TITLE. IT’S HARD TO SAY

WHO COULD BEAT THE C4 WRC TEAM IN 2009…

The Peugeot lion still roars at 150Émile Peugeot registered his lion trademark, with or without an arrow, in November 1858. Today, the lion is recognised around the world as the symbol of Peugeot products, which are sold in more than 150 countries.

Close-upRear light of the Peugeot 3008

OUR ambition

20 /

/ 21

psa peugeot Citroën has what it takes to meet the challenges of the global economic environment and the specific situation facing the automobile industry. The Group’s ambition is to enhance its global scope, achieve operational excellence and offer vehicles that anticipate customer expectations in all of its markets.

Peugeot 3008

Product and servicesAnticipate customer needs

and desires and have post-oil cars in the pipeline.

A global playerRank among the world’s leading

broadline carmakers.

EfficiencyBe a manufacturing benchmark

by gradually deploying Lean processes across

the enterprise.

psa peuGeot CitRoËn / 2008 SUSTAinAblE DEvElOPmEnT AnD AnnUAl REPORT


22 / ouR ambition > FUnDAmEnTAlS DRivinG OUR AmbiTiOn

In a particularly difficult business environment, PSA Peugeot Citroën must not only overcome the recession but also prepare the future and enhance its strengths so that it can quickly and sustainably return to profitable growth.

Rapid response to the recession –Thanks to measures to reduce costs and over-heads initiated in 2007 as part of the CAP 2010 plan, PSA Peugeot Citroën was in a healthy situ-ation when the economic and financial crisis began. Like all other carmakers, the Group has large cash needs. For this reason, it has given priority to bolstering its cash and cash equiva-lents, both by pursuing in-house efforts (notably inventory drawdowns, which were well under way in early 2009) and by seeking out external financ-ing. To prepare for a prolonged recession in its markets, PSA Peugeot Citroën also moved for-ward its 2010 fixed-cost reduction objectives to 2009. The Group saved nearly €1 billion in 2007 and €1.4 billion in 2008. It intends to pursue these efforts in 2009.

Continuous improvement in-house –The Lean approach, which has been extended from manufacturing to the entire enterprise,

involves doing things better, faster and cheaper over the long term. The approach helps reduce costs by wringing out all types of waste. Improve-ment methods are adapted to each area of the business and emphasise customer satisfaction. To deploy the approach, employees are trained in Lean principles and work in teams. The Lean pro-cess gets people to look differently at organisa-tions, operating methods, areas of difficulty and behaviours, notably to improve workplace safety.

Responsible workforce management –Even in a tough economy, PSA Peugeot Citroën remains committed to good labour relations. The Group continues to practice responsible work-force management to prepare the future, as employee training and skills development will clearly play an important role in improving perfor-mance. Agreements signed in December 2008 and April 2009 reflect these principles. By propos-ing a voluntary separation plan and training pro-grammes during periods of low output, these agreements are designed to respond responsibly to the unavoidable adjustments required by the recession and to long-term changes in the auto-mobile industry.

IN 2008The Lean approach was extended from manufacturing to the entire enterprise.

CAP 2010 delivered total cost savings of €1.4 billion.

MORE THAN 216,000 UNITS SOLD IN 2008 The Citroën C1 and Peugeot 107 emit just 106 grams of CO2 per km.

FUnDAmEnTAlS DRivinG OUR AmbiTiOn

/ 23

Partnerships and a solid footprint –In addition to a solid, long-term presence in West-ern Europe, PSA Peugeot Citroën has established operations in a number of regions with high growth potential such as China, Latin America and Cen-tral and Eastern Europe. The Group intends to expand into new markets to become a truly global broadline carmaker.

PSA Peugeot Citroën is also known for its ability to carry out long-term strategic cooperation projects with other automobile manufacturers. This strategy makes the most of each partners’ innovation capa-bilities while reducing costs by sharing resources from the development stage on through to joint production of components or vehicle bases.

Vehicles for all needs –In dealing with the recession, PSA Peugeot Citroën has decided to remain on the offensive on both the technological and marketing fronts. Proj-ects under way have been maintained and new ones initiated with the goal of offering products that respond effectively to the challenges facing the automobile industry today. The Citroën brand reinvented itself in February 2009, unveiling a new logo and a new signature. Peugeot will follow suit later on in the year.

The brands’ new identity is supported by a renewed and enhanced product plan. Peugeot

and Citroën cater to key segments with compact city cars, sedans and MPVs that meet a very wide range of driving needs. They have also embraced new concepts, such as Peugeot’s 3008 cross-over, that help broaden the customer base. At PSA Peugeot Citroën, satisfying customers means making vehicles for different needs in terms of use, engine type and fuel options. With this in mind, the Group develops and sells vehicles internationally to fit each market’s characteristics and price profile. The deep commercial vehicle line-up adds to its marketing momentum, with PSA Peugeot Citroën ranking as the European leader in this segment.

Among the various issues facing the automobile industry today, environmental concerns are undoubtedly the most demanding. The challenge for PSA Peugeot Citroën is to continue offering increasingly environmentally friendly vehicles while paving the way for technological break-throughs. In 2008, the Group confirmed its leader-ship position in low CO2 emission vehicles. Its engineers are working on several synergistic solutions in this area to keep PSA Peugeot Citroën ahead of the curve in terms of products and serv-ices while recognising the diversity of its markets and customers.

A PIONEER IN THE COUPÉ-CABRIOLET BODY STYLE, Peugeot remains the European leader in this segment. The new 308 cc confirms the brand’s reputation.


24 / ouR ambition > SUSTAinAblE DEvElOPmEnT APPROAch

SUSTAinAblE DEvElOPmEnT APPROAch IN 2008The Group deployed its 10 sustainable development objectives for 2008-2011.

PSA Peugeot Citroën was awarded Silver Class status in the 2009 Sustainability Yearbook published by SAM and PWC.

ENVIRONMENTCO2 emissions1 Continue to be the leading producer of low-emission vehicles 2 million vehicles emitting less than 120 grams of CO2 per km sold between 2007 and 2010

Eco-design2 Sharply increase the proportion of green materials in Peugeot and Citroën vehicles Raise the share of green materials to 20% of polymers contained in a vehicle in 2011

Environmental management3 Reduce the average energy used per vehicle produced in our manufacturing facilities 2.1 MWh/car in 2010

SOCIAL RESPONSIBILITY4 Extend PSA Peugeot Citroën’s social responsibility commitment worldwide

GOVERNANCESupplier responsibility5 Deploy the supplier guidelines concerning PSA Peugeot Citroën’s social and environmental responsibility requirements Involve the top 500 suppliers in the process by 2010

Socially responsible investing6 Make sure PSA Peugeot Citroën is included in the major SRI indices 3 major international indices

Stakeholder dialogue7 Lead constructive dialogue with civil society representatives

SOCIETYRoad safety8 Broadly deploy telematics services to improve user safety 1 million enabled vehicles on the road in 10 European countries by 2011

Urban mobility9 Finance innovative mobility solutions

Customer respect10 Implement the PSA Peugeot Citroën Responsible Communications Charter

10 sustainable development objectives for 2008-2011–

/ 25

Primary focus: cars on the road –During an automobile’s lifecycle, the greatest impact on the environment and society comes when the car is on the road. Although the way a vehicle is used depends on the car owner, it is PSA Peugeot Citroën’s responsibility to design products that are as safe and environmentally friendly as possible.The greenhouse effect, road safety and urban mobility are global challenges. While the Group can propose technological solutions, everyone in the community must be involved to devise an effective response.

Greenhouse effect /Air qualityThe greenhouse effect is a natural phenomenon that keeps the Earth at a liveable temperature. However, emissions of CO2 and other greenhouse gasses (GHG) from human activity have risen steadily since the mid-19th century, adding to the natural effect. There is a broad consensus in the scientific community that the Earth’s average tem-perature is rising as a result of this situation. Because internal combustion engines burn fossil fuels, the transportation industry is a significant source of GHG emissions. For PSA Peugeot Citroën, the major challenge is to continue reducing its vehicles’ contribution to the greenhouse effect. The health consequences of air pollution are also becoming a key concern, especially in large city centres. That’s why the Group is working to elimi-nate regulated contaminants like NOx, HC and particulates from tailpipe emissions and to ulti-mately introduce zero-emission vehicles.

PSA Peugeot Citroën’s sustainable develop-ment approach is derived from a real desire to understand and effectively manage the environ-mental and social issues related to automobile use. Driven by the Group’s commitment to social responsibility, proven innovation capabilities and strategy for the years ahead (which includes maintaining environmental leadership), this approach is designed to help PSA Peugeot Citroën return to profitable growth.

A product that raises numerous challenges –By enabling individual mobility, automobiles are an intrinsic part of economic and social develop-ment. At the same time, they present challenges throughout their lifecycle for society and the envi-ronment. The degree to which these challenges are taken into account will have a major impact on future generations, and the different possible responses are at the centre of PSA Peugeot Citroën’s relations with its stakeholders. Details of these responses are provided in this report.

The three main challenges facing PSA Peugeot Citroën are the greenhouse effect, road safety and urban mobility. That said, all key issues are reviewed by the appropriate internal teams, who take action when necessary.

60%of the world’s population will live in cities in 2030

compared with 50% today.

According to uN forecasts,

SUSTAINABLE DEVELOPMENT OBjECTIVE No.6

Make sure PSA Peugeot Citroën is included in the major SRI indices–3 major international indices.


26 / ouR ambition > SUSTAinAblE DEvElOPmEnT APPROAch

The number and size of cities worldwide is constantly growing, notably in the emerging economies. Non-optimised road transportation creates urban congestion that is both costly and hard on the environment. From PSA Peugeot Citroën’s perspective, the solution lies in more widespread use of low-emission vehicles, as well as in more effective policies for traffic management, alternative transportation systems and land-use planning.

Making progress in all areas –PSA Peugeot Citroën assumes its responsibilities throughout its products’ lifecycle, from the drawing board to the production line and from the show-room to end-of-life disassembly and recycling. The Group has made great strides in managing these challenges and continues to address them in a spirit of continuous improvement.

Industrial environment / Human resources policyAlthough automobile manufacturing in itself does not entail any major environmental risks, series production requires large facilities that use water and energy and generate waste. PSA Peugeot Citroën has worked for many years to reduce its plants’ impact, notably by deploying best avail-able technology at an acceptable cost. Automobile production is labour intensive and traditionally uses a largely male workforce. In response to this situation, PSA Peugeot Citroën

Road safety / Urban mobilityAlthough there is still room for improvement in the developed countries, the issue of road safety has shifted geographically as emerging economies see more and more road deaths. The loss of life and collectively assumed cost of road risk affects these countries’ economic growth. Today’s crash protection systems are greatly optimised and are gradually being extended to all Peugeot and Citroën ranges sold worldwide. As a result, driver training, better infrastructure and faster emer-gency response are now key factors in solving the equation of road safety.

In implementing its sustainable development approach, the Group refers to a structured set of international or industry standards and benchmarks, including:• International Financial Reporting Standards (IFRS) for accounting• ISO 9001 for quality• ISO 14001 for the environment• The third generation (G3) Sustainability Reporting Guidelines issued by the Global Reporting Initiative for reporting• The Global Compact for ten universally accepted principles in the areas of human rights, labour, environment and anticorruption. PSA Peugeot Citroën joined the Global Compact

STANdARdS ANd COMMITMENTS–

and committed to these principles in 2003.• CBCSD: PSA Peugeot Citroën is also a member of the China Business Council for Sustainable Development.

In addition, the Group has developed its own benchmarks and guidelines:• Ethics: Code of Ethics• Social responsibility: Global Framework Agreement on Social Responsibility• Purchasing: PSA Peugeot Citroën’s requirements regarding social and environmental responsibility with respect to its suppliers• Marketing and advertising: Responsible Communications Charter

SINCE 2004, the Group has provided information on its sustainable development approach in French and English at www.sustainability.psa-peugeot-citroen.com

/ 27

has made improving working conditions and pro-moting equal opportunity and diversity a major focus of its global human relations policy. In the current period of economic and financial crisis, responsible management of jobs and skills sets is more than ever a top priority.

Organisation and control –The Group’s sustainable development approach is designed to achieve a fair balance between profitability and environmental and social respon-sibility. It is an integral part of the corporate gov-ernance system.

The Sustainable Development Department, which reports directly to a member of the Executive Committee, has pursued this structured approach since 2003. It works with a network of front-line correspondents in all the Group’s departments who are experts in different areas of corporate responsibility (human resources, environmental management, purchasing, marketing, sponsor-ship, etc.). The Department convenes a Sustain-able Development Committee every month to meet with the network’s members.

The Group has defined 10 sustainable develop-ment objectives for 2008-2011 that have been translated into annual action plans. This roadmap has been validated by the Executive Committee, which tracks the objectives on a quarterly basis.

Sustainable development reporting –The Group reports on its sustainable development performance annually on the basis of operating indicators. The audited results are presented in this report, in the 2008 Performance Indicators supplement (see CD-Rom) and at www.sustainability.psa-peugeot-citroen.com

In 2007, the Group decided to include information in the annual report on its sustainable development policy, achievements and performance indicators to demonstrate the importance of sustainable development in its overall strategy, as well as its commitment to giving all stakeholders easy access to the data. For the fifth year in a row, the Group’s reporting follows the Sustainability Reporting Guidelines issued by the Global Reporting Initiative, with the goal of continuously improving transparency. The third generation (G3) guidelines have been applied for the past three years.

SUSTAINABLE DEVELOPMENT GOVERNANCE AT PSA PEUGEOT CITROËN –

Supervisory Board

Managing Board

Sustainable Development Department

Corporate functions and operating units

Sustainable Development Committee

SUSTAINABLE DEVELOPMENT OBjECTIVE No.7

Lead constructive dialogue with civil society representatives–

Close-upRear light of the Citroën C3 Picasso

OUR BusINess

28 /

/ 29

psA peuGeoT CITRoËN / 2008 SUStainable DevelOPment anD annUal RePORt

Citroën C3 PiCasso

With its extended, renewed line-up, PSa Peugeot Citroën provides ever improving answers to meet customer expectations throughout the various markets worldwide. Peugeot and Citroën deploy their skills in several key segments, from compact city cars and mPvs to light commercial vehicles. they have also moved to offer specific models outside Western europe and to expand into new segments such as crossover vehicles.

Passenger cars The Peugeot 207

and Citroën C4 Picasso are segment leaders in Europe.

international expansion

More than a third of unit sales are generated outside

Western Europe.

light commercial vehicles

The Group is European leader with nearly 20%

of the market.


30 / ouR BusINess > PeUgeOt anD CitROën

In 20081,904,000 vehicles and 135,000 motorcycles sold worldwide.

The Peugeot 207 was the best selling car in its category in Europe. Peugeot’s extensive compact city line-up includes the new 107, 206+, 207 and 1007.

PeUgeOt

Europe with emissions below 120 grams of CO2 per km is a Peugeot. To maintain and widen its lead, the brand has committed to breakthrough technologies. It pioneered in 1995 with an electric version of the 106, the best selling car in its cate-gory worldwide. Peugeot will roll out a new EV in late 2010. In hybrids, the 3008 will be the first Group vehicle to benefit from HYbrid4 technology, less than two years after its launch. Peugeot is also exploring micro-hybrid solutions, such as Stop & Start technology. The second generation Stop & Start will be widely deployed in the model ranges starting in 2010.

A range filled with remarkable models –Once again, the 207 was Peugeot’s most popular vehicle of the year, with 468,300 units sold in 2008. This performance made it the third best-selling vehicle in Europe, all makes and models com-bined. At the same time, the 207 cc consolidated its ranking at the top of the European coupé- cabriolet segment. Peugeot added a SW body style to the 308 family, which leveraged a very good CO2 and fuel economy rating to achieve unit sales of 290,100 in 2008. This lifted Peugeot’s mar-ket share in the C-segment in Europe. Range renewal continued in 2008 with the arrival of the new 407 and 107. Commercial versions of the new Partner and the Bipper were also brought to

In 2008, Peugeot sold its 50 millionth car and benefited from a solid presence in more than 150 countries thanks to its attractive line-up. In 2009, the brand will extend its market coverage by introducing two vehicles in new segments.

Trust, passion and inspiration –In 2010, the Peugeot brand will celebrate 200 years of existence, largely shaped by a passion for the automobile. Over the past two centuries, Peugeot has applied its innovative spirit to each era and to drivers’ changing demands. By listening care-fully to consumers, the brand has significantly improved its quality of service over the past few years. Peugeot is building on these accomplish-ments to nurture a solid relationship of trust with its customers.

Sustainable mobility for all –Offering mobility for all while keeping fuel con-sumption and CO2 emissions under control is a priority objective at Peugeot. The brand has put together a competitive set of solutions to meet this challenge with a broad range of bicycles, scooters and cars. In Europe, Peugeot leads in vehicle seg-ments that emit less than 120/130 grams of CO2 per km. In fact, one new car out of six sold in

10,000 outlets worldwide.

14,800 employees.

PeugeoT In 2008

Blue lIon Peugeot offers 12 body styles that sport the Blue Lion eco-label for CO2 emissions of less than 130 grams per km: the 107, 206+, 207, 207 cc, 207 SW, 1007, 308, 308 SW, 3008, 407, 407 SW and Bipper Tepee.

The Peugeot 207 Super 2000 swept the Monte Carlo IRC race, finishing 1-2-3.

/ 31

market during the year, along with a Tepee version of both models for non-professional use. Peugeot now boasts a full, consistent range of commercial vehicles with five models adapted to different needs and uses.

Continued international expansion –Despite the very fraught economy, Peugeot sales outside Western Europe rose again in 2008, by 13%. This represents a twofold increase since 2000, with sales outside Western Europe now accounting for 43% of the total. The Russian sub-sidiary successfully ramped up during the year, lifting its sales by 83%. Peugeot’s international momentum is also supported by the sale of spe-cific ranges in the brand’s priority growth regions.

Renewal and conquest in 2009 –In 2009, Peugeot is launching several new models made in France. The 308 cc picks up where the 307 cc left off, embodying the legendary Peugeot coupé-cabriolet know-how that has resulted in sales of more than 650,000 units. The model also adds a third body style to the highly recognisable 308 family. The launch of the 206+, successor to

the 206, will help strengthen Peugeot’s position in the compact sedan segment. Positioned between the 107 and 207, the 206+ is a modern, entry-level vehicle that offers an attractive set of features at a competitive price. Peugeot also intends to build on its success by introducing two vehicles for new segments. The 3008, Peugeot’s first crossover, combines the advantages of a sedan, an MPV and an SUV. The brand will also add a compact MPV in autumn 2009.

QUALITY: AN INTEGRAL PART OF THE PEUGEOT NETWORK –Peugeot organises an awards ceremony at which trophies for greatest improvement and noteworthy achievement in service quality are handed out for new car sales and after-sales service.

3

800

means it belongs to the medium compact range.

means it is part of the current range generation.

means it has a high-roof architecture.

PeugeoT 3008:


32 / ouR BusINess > PeUgeOt anD CitROën

In 20081,356,000 vehicles sold worldwide.

Leader in compact MPVs in Europe and solid position in low CO2 emission vehicles.

CitROën

segment with several Airdream versions of the C5, which emit less than 140 grams of CO2 per km.

With the Nemo, launched in February 2008, and the new Berlingo, introduced in May, Citroën now fields five light commercial vehicles. Nearly one in five Citroëns sold worldwide is a light commercial vehicle. The brand did not neglect markets out-side Europe either, renewing its line-up with mod-els like the C-Quatre and C-Élysée in China and the C4 hatchback in Latin America.

Technologies to preserve the environment –Citroën has always initiated accessible technolo-gies that deliver an overall reduction in fuel con-sumption and CO2 emissions. It will continue to offer vehicles that address the need for low running costs and environmental stewardship.

Electronic manual gearboxes have been widely deployed throughout the line-up, equipping the C1 through C4 sedans, the Nemo, C4 Picasso and Grand C4 Picasso. This solution maintains driving pleasure while reducing fuel consumption by 3-5% in relation to a regular manual gearbox. Citroën has a solid position in the very low CO2 emissions segment (110 grams or less per km) with its C1, which emits just 106 grams of CO2 per km. In 2008, the brand accounted for 23% of sales in this segment in Europe. The C4, restyled in second-half 2008, offers two new petrol engines

Backed by 90 years of innovation and creativity in automobiles, Citroën benefited from the strengths of its deep and modern line-up of passenger cars and commercial vehicles in 2008. This set the stage for a new page to be written in the brand’s history in 2009, shaped more than ever by a spirit of technology and creativity. This will be particularly evident in solutions to preserve the environment.

Popular models –Citroën was the European leader in compact MPVs in 2008 thanks to the five- and seven-seat C4 Picasso, which sold 188,000 units during the year. The C3 Picasso “Space Box”, launched in 2009, expands the MPV range and gives the brand added strength to enhance its leadership. The new C5, available in sedan and tourer ver-sions in April and June, exceeded objectives with worldwide unit sales of 87,500 in 2008. The models did particularly well in Italy, Germany, Great Britain, France, Belgium and the Netherlands. The brand also stepped up a gear in the corporate fleet

C5 AIRDReAM WITH 110 HP HDI engIne AnD PARTICulATe FIlTeR. Citroën has created the Airdream eco-label for cars that emit 140 grams of CO2 per km or less, that are made in an ISO 14001-certified plant and that have an end-of-life recovery rate of 95%.

As World Rally Championship winner four times in the Manufacturer category and five times in the Driver and Co-Driver categories, Citroën has earned a special place in the history of motor sports.

/ 33

and latest generation HDi diesel engines that sig-nificantly improve its environmental performance. As a direct result of this strategy, 30% of the Citroën vehicles sold in Europe in 2008 boasted CO2 emis-sions of 120 grams per km or less.

A future guided by creative technology –The DS3, the first model from the Different Spirit (DS) line, will come to market in early 2010. A pre-view was provided in February 2009 with the DS Inside concept car. This new line of distinctive models, which complements the traditional Citroën line-up, is designed for customers interested in style and driving pleasure but pragmatic when it comes to features and price.

As part of its commitment to preserving the envi-ronment, the brand will extend the second gene-ration of Stop & Start technology—first presented on the C2 and C3—to the entire line-up. The new system leverages a combined alternator-starter to stop and start the engine. It also recovers brake energy. At the 2008 Paris Motor Show, Citroën showcased a C3 Picasso HDi equipped with a 110 hp engine, Stop & Start technology and a six-speed electronic manual gearbox that emits just 110 grams of CO2 per km.

Starting in 2011, Citroën will offer vehicles featur-ing the HYbrid4 technology unveiled in 2008 on the Hypnos concept car. This environmentally

friendly, executive range concept is propelled by energy from an electric motor on the rear axle and from an HDi diesel engine. The Hypnos can cover 100 km on 4.5 litres (equivalent to over 52 miles per gallon) with CO2 emissions of less than 120 grams per km. The DS5 will be the first Citroën model to benefit from this technology.

In response to the widespread desire for “better” consumption, Citroën is exploring new avenues in automobile design with the C-Cactus. The idea is to focus on the car’s occupants while maintaining only the features that are essential to their well being. As a result, the C-Cactus has about half as many components as a conventional vehicle. It uses the most environmentally friendly technologies available, all wrapped up in a clever package.

8,000 outlets worldwide.

13,500 employees.

CITRoën In 2008

CUSTOMER SATISFACTION ON THE RISE –Over a year ago, Citroën implemented a new policy and new action plans to become a benchmark in service quality. Initial results in 2008 were particularly encouraging, with remarkable gains in customer surveys in France, Germany, Great Britain, China and Latin America.

BIg on THe InSIDe, SMAll on THe ouTSIDe THe C3 PICASSo delivers superior environmental and cost performance with innovative style. Its low CO2 emissions rival with the best the competition has to offer.

34 /


34 / ouR BusINess > 2008 PeRFORmanCe

In 2008PSA Peugeot Citroën maintained its global market share at 5%.

36.2% of the Group’s vehicles were sold outside Western Europe.

ReSilienCe in DeClining maRKetS

In Spain, where the automobile market plummeted by 29.8%, Group registrations declined 30% to 254,300 units. Market share for the year stood at 19.1%, virtually unchanged from 2007 (19.2%). In the United Kingdom, the Group pursued its strategy of limiting the adverse sales impact of the unfavourable pound/euro exchange rate throughout the second half. As a result, registra-tions fell 17.1% to 237,200 units. In Italy, the 12.5% decline in Group registrations to 235,700 was in line with the market’s overall 12.7% decrease.

growth interrupted by recession in emerging economies –In most of the emerging automobile markets, demand contracted more or less sharply in the second half as the global financial and economic crisis took hold. This situation directly impacted PSA Peugeot Citroën’s performance. In Latin America, the market experienced moderate full-year growth of 2%, reflecting a 14.4% increase in the first half and an 8.4% decline in the second. Peugeot and Citroën lifted their registrations in the region by 5.4% over the year to 259,000 units. In a Chinese market that expanded by 5.1%, Dongfeng Peugeot Citroën Automobile (DPCA) saw its registrations decline 14.1% to 178,100 units due to falling sales of its core mid-range vehicles.

The global market for passenger cars and light commercial vehicles contracted by 5.4% in 2008 to 65 million units. Demand in Western Europe slackened in the first half, while sales in emerging markets continued to show strong growth. In the second half, however, the eco-nomic and financial crisis caused demand to collapse in automobile markets around the world, dragging down the Group’s final-quarter sales by 21% in Western Europe and 9% in emerging markets. Over the full year, world-wide sales of assembled and CKD vehicles declined by 4.9% to 3,260,400, units.

Markets hit hard in Western europe –In a European car and light commercial vehicle market that fell 8.8% in 2008, PSA Peugeot Citroën registrations contracted 8.6% to 2,130,900 units, of which 1,125,700 Peugeots and 1,005,200 Citroëns. Market share for the year stood at 13.8%, unchanged from 2007. In France, Group registra-tions rose 1.9% to 794,200 in a market down 0.6%, for a market share of 31.6%. This performance reflects Peugeot’s and Citroën’s solid positioning in fuel-efficient vehicles, sales of which were bol-stered by a national feebate scheme. In Germany, PSA Peugeot Citroën widened its market share by 0.2 points to 5.7%. Registrations rose 2.1% to 189,500 in a market down 1.7%.

WoRlDWIDe SAleS BY RegIon (in thousands of units) –

31 32 31

215 266 263

1,550 1,575 1,311

237 240 203

364 312 421222 255 263

746 749 768

3,366 3,4283,260

FranceRest of Western EuropeCentral and Eastern Europe and RussiaAfrica and the Middle EastLatin AmericaAsia PacificOther (temporary transit)

2006 2007 2008

/ 35

In Central and Eastern Europe, where the market contracted by 1% over the full year (up 16% in the first half but down 14.9% in the second), PSA Peugeot Citroën registrations decreased by 3.3% to 191,000 for a steady market share of 7.2%. Registrations rose 67% in Russia to 60,300 units in a market that grew by a strong 13.6%.

Weathering the crisis with a vibrant line-up –In a very difficult business environment, the Group leveraged the Peugeot and Citroën ranges’ strengths to defend its positions.

For the third year in a row, PSA Peugeot Citroën sold more than one million vehicles emitting less than 140 grams of CO2 per km (1,161,000 units worldwide), thereby confirming its environmental leadership.

Peugeot once again led the small car segment in Europe thanks to the 206 and 207, which sold 760,600 units worldwide. The 107 provided an added boost, with unit sales up 2.1% to 106,500 over the year – a performance that reflected the attractiveness of the model’s low running costs and low CO2 emissions.

In the first full year on the market for the five-seat C4 Picasso “visiospace”, the C4 Picasso range was again the leader in the Western European

compact MPV segment, with nearly 188,000 units sold. The Xsara Picasso’s strong showing (76,000 units sold) contributed to this leadership position, which will be enhanced by the introduction of the C3 Picasso in 2009.

In the light commercial vehicle market, the launch of the Citroën Nemo and Peugeot Bipper, along with new versions of the Citroën Berlingo and Peugeot Partner, enabled the Group to extend its market leadership in Western Europe, lifting its share by 1.3 points to 19.9%. Light commer-cial vehicle sales rose 4.9% over the year to 456,500 units, of which 232,600 Peugeots and 223,900 Citroëns.

Demand is expected to be weak in many markets in 2009, with sales forecast to decline 20% in Europe alone. In response, PSA Peugeot Citroën will leverage the solid strengths of its latest offer-ings – including the new C5 and the 308 range – and continue to launch new vehicles (C3 Picasso, 3008, etc.) at a sustained pace to ensure that its models are ever more closely aligned with customer expectations in all markets.

AlTHougH THe geRMAn MARKeT ConTRACTeD In 2008, Group registrations increased by 2.1%.

PSA PeugeoT CITRoën RegISTRATIonS BY Co2 eMISSIonS leVel In 2008 (passenger cars in Europe) –

32%*

19.6%

1%

12.9%

34.3%

> CO2 emissions in grams per kilometre

< 120

from 121 to 140

from 141 to 160

from 161 to 200

from 201 to 250

> 250

* Of which 11.4% emitting less than 110 grams per km of CO2.

36 /36 / ouR BusINess > inteRnatiOnal eXPanSiOn

latin ameRiCaIn 2008The Mercosur Business Unit’s scope was extended to cover all of Latin America.

Introduction of the Peugeot 207 Mercosur range, made at Group facilities in Argentina and Brazil.

The Peugeot 207 Mercosur, developed for the local market and produced in Argentina and Brazil, was introduced in three-and five-door hatchback, notchback, SW and Escapade off-road versions. The restyled Citroën C3, with spe-cific body components for the Latin American market, arrived in showrooms in September, followed in November by the C4 hatchback, pro-duced in Argentina. Citroën’s range for the local market was also extended during the year with two models imported from Europe: the Grand C4 Picasso and the new C5 (sold in Argentina).

Sustained expansion of the dealership net-works also strengthened the brands’ marketing power. The number of Peugeot and Citroën dealerships in Brazil, for example, increased by 20% to 273 in 2008.

Local teams have also taken active steps to improve product and service quality, thereby reducing incidents by 30%, breakdowns by 25% and warranty costs by 25% in just one year.

Investments in manufacturing and technical capacity –The Group brought its Brazilian facilities into compliance with PSA Production System practices

In keeping with changes in the local automobile markets, PSA Peugeot Citroën has pursued its industrial, marketing and technological efforts to strengthen its position in Latin America. The Group took immediate measures in Novem-ber 2008 to respond to the sudden collapse in demand, notably by adjusting output. The Brazilian market alone was down 25% in November from the year-earlier period.

Continued commercial expansion –In Brazil, the region’s main market (up 14.1%), Group registrations rose 17.7% to 151,000 units. Registrations in Argentina grew by 2.5% to 81,700 units in a market that expanded by 7.8%. This performance was driven in part by several new model launches.

A ReCenT ADDITIon To CITRoën’S lIne-uP In lATIn AMeRICA,the C4 notchback has been produced at the Buenos Aires plant since 2007.

5 Peugeot and Citroën models launched in Latin america in 2008.

unIT SAleS (in thousands) –

20082007

266

263

/ 37

to prepare for production start-up of the 207 Mercosur range. Changes to production lines and the addition of new equipment helped smooth parts supply and improve workstation ergonomics. In Argentina, capacity extension at the Buenos Aires plant involved setting up new lines in the body-in-white and assembly units and reor-ganising supply chain operations. PSA Peugeot Citroën continued to enhance its technical capacity in Latin America so as to be able to meet local market expectations even more effectively. In August 2008, the Brazilian engineering teams were treated to the first facility outside France for viewing full scale digital mock-ups.

At the Porto Real plant, the new Mercosur Materi-als Laboratory is fitted with innovative equipment for studying the chemical and mechanical charac-teristics of different materials with the goal of facilitating certification of materials and automo-bile parts while meeting quality, cost and timetable constraints.

A wide-ranging local commitment –As one of the region’s business partners, PSA Peugeot Citroën works with local players on a wide range of initiatives that promote such important values as education, safety, inclusion and environmental awareness.

Several road safety projects were deployed in 2008. In Brazil, the Group won a Sustainable Attitude prize for its campaign on child passen-ger safety and the related guidelines brochure, more than 30,000 copies of which have been distributed. PSA Peugeot Citroën has also par-ticipated for several years through donations and employee involvement in a Global Road Safety Partnership (GRSP) programme to reduce the number of road accidents in the city of Resende in Rio de Janeiro state.

In Argentina, the Group has launched a prevention campaign targeted to employees’ children and Buenos Aires schools to foster the emergence of a road safety culture. The campaign includes a contest and educational brochures.

As part of PSA Peugeot Citroën’s partnership with the Iochpe Foundation in Brazil, the Porto Real plant has provided space since March 2008 for the Formare programme, which provides vocational training for young people from local low-income families.

BRAZIL: THE GROUP DEMONSTRATES ITS INNOVATIVE CAPABILITIES TO A NEW AUDIENCE –At SAE Brasil 2008, South America’s premiere engineering event, PSA Peugeot Citroën showcased the new Peugeot 207 Passion and a flex-fuel engine, both of which were designed in Brazil. This event gave the Group the opportunity to reach an audience of suppliers, engineers and journalists and present the tangible results of its efforts to strengthen local engineering and development teams, as well as its ability to deliver products that are increasingly aligned with local needs.

In 2008, Peugeot launched the 207 in Latin America in three- and five-door, notchback and SW versions. All are produced locally at the Group’s plants in Porto Real, Brazil and Buenos Aires, Argentina.

38 /


38 / ouR BusINess > inteRnatiOnal eXPanSiOn

ChinaIn 2008The China Tech Centre, an R&D and styling facility, opened in Shanghai.

The Group devoted RMB 4.5 million to road safety awareness campaigns in China.

enabled the brand to double its sales in the corresponding segment.In September, the Citroën C-Quatre and Peugeot 207 cc joined the line-up, followed at the end of the year by the locally produced Peugeot 207 notchback and Citroën Grand C4 Picasso impor-ted from Europe. This last vehicle’s “visiospace” concept and premium features, including a roomy interior, modular design, high-end safety systems and other equipment, give it a unique profile in the Chinese market.

To support these launches, both brands made considerable efforts in 2008 to expand their net-works to new cities. By year-end, the Dongfeng Citroën and Dongfeng Peugeot networks had nearly 800 outlets between them.

Manufacturing and technical resources to drive success –The Wuhan plant is now equipped to produce upper-mid-range models, allowing it to serve local market needs even more effectively. The Xiangfan mechanical components plant has also been given new resources to manufacture the family of EW new petrol engines.

In addition, new recycling and wastewater treat-ment equipment has been installed in Xiangfan to reduce the environmental impact of the plant’s manufacturing operations.

PSA Peugeot Citroën began operating in China in the 1990s through a 50-50 joint venture with Dongfeng Motors that allowed it to comply with Chinese legislation. Dongfeng Peugeot Citroën Automobile (DPCA) has two plants in Hubei province.

noticeable slowdown in market growth –In 2008, the Chinese automobile market grew at a much slower pace, expanding by 5.1% over the full year compared with 24.5% in 2007. Demand contracted in the second half of 2008, by 2.6%. A number of factors contributed to this situation, including the Sichuan earthquake, driving restric-tions in Beijing during the Olympic Games, the fact that certain local markets have reached maturity and the global financial crisis’ impact on the Chi-nese economy. The downturn in the second half particularly affected the mid-range segment that is central to DPCA’s line-up. As a result, the joint venture’s registrations declined 14.1% from the year before to 178,100 units.

expansion of the line-up and dealership network –The year also saw the introduction of the Peugeot 307 hatchback and the very success-ful launch of the new Citroën C-Élysée, which

Dongfeng Citroën:• China’s leading broadline brand for customer satisfaction in the area of after-sales service, according to a JD Power survey.• Ranked 4th in China, all brands combined.

6large cities in China

welcomed the Group’s travelling road

safety exhibition, giving 60,000 families

an opportunity to raise their awareness

about this major issue.


20082007

209

179

/ 39

In 2008, the Group opened an R&D and styling facility in Shanghai called the China Tech Centre (CTC) with the goal of developing Peugeot and Citroën models locally to meet Chinese custom-ers’ expectations even more fully.

As of November 2008, some 200 technicians, purchasing officers, engineers and designers were working at the CTC, covering all areas from vehicle architecture to engine components and from design to local sourcing. CTC signed a co -operation agreement in 2008 with the automobile department of the prestigious Tongji University under which the Centre will provide opportunities for interns and recent graduates.

numerous awareness campaigns –In 2008, the Group launched a host of initiatives with local partners concerning such topics as road safety, the environment and assistance to victims of natural disasters. Following the Sichuan earth-quake in May 2008, PSA Peugeot Citroën donated more than RMB 3 million to help local residents.Building on its longstanding commitment to improving road safety in China, the Group also launched three major campaigns to raise aware-ness among the general public:- A travelling road safety exhibition toured the country for seven months to teach nursery and elementary school students about road safety in a fun-filled way.

- The Group organised a road safety advertising contest in cooperation with the Ministry of Health’s Centre for Disease Control. - Lastly, a road safety exhibit was set up at the Beijing Science and Technology Museum.

6modelsmade locally or imported were launched

in China in 2008, expanding the Peugeot

and Citroën line-ups.

“30 SECONDS FOR THE ENVIRONMENT”– In 2008, in cooperation with the Chinese National Radio network’s business station, PSA Peugeot Citroën carried out a very popular campaign to inform listeners in a humorous way of environmentally-friendly driving behaviours that can reduce CO2 emissions.

In CHInA, DPCA’s new manufacturing unit next to the existing Wuhan plant will start producing the new C5 in late 2009. Once ramped up, it will boast a production capacity of 150,000 vehicles a year.

40 / ouR BusINess > inteRnatiOnal eXPanSiOn

CentRal anD eaSteRn eUROPe – RUSSiaIn 2008Cornerstone laid for the new plant in Kaluga, Russia.

Production of the Citroën C3 Picasso began at the Trnava plant in Slovakia.

In the still buoyant Russian market, which expanded 13.6% over the year (with 32.9% growth in the first half, followed by a 1.5% decline in the second), registrations of PSA Peugeot Citroën vehicles increased by 67% to 60,300 units.

Manufacturing operations –Owned jointly with Toyota, the TPCA plant in Kolín, Czech Republic manufactured 320,000 Peugeot 107s, Citroën C1s and Toyota Aygos during the year. The recently restyled compacts are highly fuel efficient, emitting just 106 grams of CO2 per km in their petrol versions, and have proven highly popular in a number of European markets.

Also in 2008, the plant in Trnava, Slovakia suc-cessfully started up production of the new Citroën C3 Picasso, whose innovative concept and four engine options position it to lead the compact MPV market. The C3 Picasso is being assembled alongside the Peugeot 207, which has been built at the Trnava facility since 2006.

PSA Peugeot Citroën’s confidence in the Russian market’s long-term growth potential was demon-strated in June, when the cornerstone was laid for its new joint-venture plant in Kaluga. Owned 70% by the Group and 30% by Mitsubishi Motors Corporation (MMC), the facility will manufacture mid-range C-segment models for Peugeot and Citroën and mid-sized SUVs for all three brands. The models will be marketed in Russia.

Two major growth markets for the automobile industry are Central and Eastern Europe and Russia, where there are still relatively few cars per capita and where purchasing power has risen steadily in recent years.

In the final quarter of 2008, however, a number of events severely dampened growth in automobile sales in most markets in the region. The financial crisis had a severe impact on Hungary, Poland and the Czech Republic in particular, which all saw a sharp drop in their exports to Western Europe. At the same time, the economic crisis led to higher unemployment across the region.

As a result, in a market that declined 1% over the year (reflecting 16% growth in the first half, followed by a 14.9% drop in the second), PSA Peugeot Citroën registrations retreated 3.3% to 191,000 units.

THe ISo 14001-CeRTIFIeD PlAnT In TRnAVA, Slovakia is now producing the new Citroën C3 Picasso.


20082007

255 26

3

/ 41ouR BusINess > OtheR bUSineSSeS

geFCO In 2008€3.5 billion in revenue, down 0.5% on 2007.

Subsidiaries opened in Latvia, Ukraine and Chile. Increase in inbound and outbound China tonnages.

750,000 vehicles transported by rail in Europe during the year.

Hiring and integrating the disabled –In June 2008, Gefco signed an agreement with employee representatives concerning jobs for the disabled, in line with PSA Peugeot Citroën’s Global Framework Agreement on Social Responsibility. The company formalised its disability policies with, in particular, the creation of a Disabilities Ini-tiatives unit. As part of these policies, the company also conducts sensitivity programmes and sets hiring objectives for coming years. It is also plan-ning to deploy initiatives to support hiring of the disabled, such as redesigning workstations, adjusting working hours and providing access to appropriate training.

Sustained building optimisation –Between 2005 and 2008, Gefco chaired a com-mission to create a dedicated Sustainable Devel-opment Charter for logistics buildings, under the auspices of the Afilog association. It was therefore pleased to learn that logistical platforms will now be covered by France’s NF Commercial Buildings – High Environmental Quality (HQE) Procedure, which is designed to improve a building’s integra-tion into the surrounding environment, attenuate noise, structure the use of multi-modal systems and limit energy and water use. Gefco plans to seek certification for its logistical platforms now being built in France. A specific certification for existing buildings is currently being developed.

Gefco, a wholly-owned subsidiary, is pursuing a strategy based on industrial supply chain inte-gration and international development. It offers high value-added solutions across the supply chain, including overland, sea and air transport, industrial logistics, container management and vehicle preparation and distribution.

Resilience in a weaker economy –In 2008, revenue from services performed for other Group companies was stable at €2,171 mil-lion, while revenue from services sold to external customers decreased by 2.7% to €1,365 million. At €127 million, or 3.6% of revenue, recurring operating income was adversely affected by the steady rise in oil prices during the first seven months of the year and by the collapse in auto-mobile demand, Gefco’s largest market. In response, the company led a variety of effective action plans throughout the year, with improved expense dis-cipline helping to offset part of the cost inflation.

In line with its strategy, Gefco continued to expand in the global marketplace and diversify its business base in 2008. Today the company delivers its expertise to customers in such industries as auto-motive equipment, scooters and motorbikes, per-sonal care products and consumer electronics.


42 / ouR BusINess > OtheR bUSineSSeS

banQUe PSa FinanCeIn 2008A good performance for the year, with revenue gaining 4.5% to €2.1 billion.

New retail financing provided for 848,077 new and used vehicles, down a slight 0.3% from 2007.

The Bank is continuing to focus its strategy on building sales of services to Peugeot and Citroën customers. The number of auto insur-ance policies sold during the year rose 14.3%, for example, led by higher sales of financing and service packages.

Varying performance by market –Loan volumes rose sharply in 2008 in certain European markets, such as Austria (up 11.4%), Germany (up 6.5%) and Poland (up 17.5%). The Bank also enjoyed strong growth in new lending in Brazil (up 45.8%) and Argentina (up 35.8%), reflecting robust local sales of Peugeot and Cit-roën models and the deployment of an increased number of joint programmes with the brands. On the other hand, finance volumes contracted sub-stantially in Spain, Italy and Mexico as the local automobile markets went into a free fall.

Risk management –Against this backdrop of economic crisis, Banque PSA Finance reinforced its collection systems, particularly in the United Kingdom and Southern Europe. At the same time, the risk selection policy was regularly reviewed in order to respond on a timely basis to the fast changing economic and financial environment. The Bank ended the year with stronger marketing positions, stable net bank-ing revenue and a credit loss ratio of less than 0.5% of average net loans.

In 23 countries around the world, Banque PSA Finance supports the sale of Peugeot and Cit-roën vehicles by financing new vehicle and replacement parts inventory for dealers and offering a comprehensive array of financing and related services to carbuyers.

Business review –The 2008 financial crisis caused sources of financing to dry up and refinancing spreads to widen. This had a direct impact of a large num-ber of automobile markets, which saw a steep decline in demand.

Nevertheless, Banque PSA Finance delivered a satisfactory marketing performance and limited the margin impact of higher refinancing costs and escalating credit risks. The penetration rate among buyers of new Peugeots and Citroëns rose to an all-time high of 27.3%, helping to cushion the effects of the crisis on lending volumes.

As of 31 December 2008, outstanding retail loans stood at €17,913 million, up 0.3%, with the loan book outside Western Europe rising 22.1% to €1,090 million.

Outstanding wholesale loans declined 22% over the year to €4,370 million, reflecting the major efforts undertaken by the Group to reduce inven-tory. In all, the total Banque PSA Finance loan book contracted 5% during the year, to €22,283 million at 31 December.

27.3% the percentage

of new Peugeot and Citroën

vehicles financed

by Banque Psa Finance,

up from 26.1% in 2007.

/ 43

FaUReCiaIn 2008€12 billion in revenue, down 5.1%.

Deployment of the Challenge 2009 plan, calling for €600 million in cost savings.

and its position as a supplier on models that con-tinued to sell fairly well, such as the Chevrolet Malibu and the BMW X6. Sales in Asia rose 3.4% during the year, led by 6.9% growth in China.

The company also continued to diversify its cus-tomer portfolio in 2008, increasing the percentage of business from BMW and Volkswagen. The latter is now the company’s largest customer, account-ing for 23.9% of revenue, ahead of PSA Peugeot Citroën, at 22.9%.

In response to the difficulties in the automotive markets, Faurecia has deployed the Challenge 2009 plan. As part of this process, in April 2009, the company announced the completion of the first phase in securing its financing, which involved a total of €1,633 million provided by three types of financing facilities: a €1,170 million bank loan, a €250 million loan from Peugeot S.A. and an additional €213 million line of credit from a French banking syndicate. In addition, at the Annual Meeting on 24 April, shareholders approved the second phase, comprising a €450 million rights issue underwritten by Peugeot S.A.

The Faurecia subsidiary ranks among the world’s top three automotive equipment manufacturers in each of its core component families: seats, vehicle interiors, front-ends and exhaust sys-tems. It is committed to supporting carmakers in their global expansion by offering superior cost and quality performance.

Faurecia’s recurring operating income amounted to €91.2 million in 2008, representing 0.8% of sales. These results reflected the sudden 20.9% drop in business in the fourth quarter as conditions sharply deteriorated in many automobile markets around the world. The restructuring programmes undertaken during the year to align staffing with demand represented a total cost of €162 million and concerned 5,150 people, mainly in France.

Sales in Europe declined by 6.5% on a significant reduction in production volumes across the cus-tomer base. Sales in North America gained 3.9%, on the other hand, with unit sales remaining firm thanks to the company’s lack of exposure to the large vehicle segment, which was the hardest hit,

Unveiled at the 2008 Los Angeles Motor Show, the “Light Attitude” concept car demonstrates Faurecia’s latest advances in eco-design. It effectively showcases the company’s ability to reduce the weight of tomorrow’s cars and trucks – a critical driver of improved fuel efficiency and lower carbon emissions – with ten breakthrough

technologies, whose combined implementation removes as much as 30 kg from a vehicle’s total weight. The dashboard’s hard-surface plastics, for example, have been replaced by fabrics, while seat structures use composites to replace conventional aluminium and steel. Other innovations have been applied

to the doors and the exhaust system. Light Attitude offers a glimpse of the next generation of Faurecia’s lightweight portfolio of products, which will enable weight reduction of more than 20 kg for several models in development.

“LIGHT ATTITUDE”: A SLIMMED-DOWN CONCEPT CAR FOR A SMALLER ENVIRONMENTAL FOOTPRINT –

Seat deSign on the Citroën C-Cactus concept car

OUR COMMitMent

44 /

/ 45

PSa PeUgeOt CitROËn / 2008 SUStainable DevelOpment anD annUal RepORt

Capitalising on its expertise, pSa peugeot Citroën is committed to maintaining its european leadership in environmentally friendly vehicles, even as it continues to optimise its internal combustion engines and explore alternative propulsion technologies. it is also highly focused on delivering superior safety performance and respecting its commitments to employees.

the CitROën C-CaCtUS COnCept CaR

Social responsibility Every subsidiary has pledged

to support the Global Framework Agreement on Social Responsibility.

Greenhouse effect Nearly 1.2 million vehicles

emitting less than 140 grams of CO2 per km sold in 2008.

Road safety13 models awarded Euro NCAP

five-star rating.


46 / OUR COMMitMent > tRanSlatinG neeDS intO pRODUCtS

CO2

END OF LIFEFacilitate the collection and processing of end-of-life vehicles and components by specialised providers of decontamination, recycling and resource recovery services

USEHelp to attenuate the impact of using an automobile, by promoting safer, more environmentally responsible driving practices

5

PRODUCTIONReduce the environmental impact of automobile manufacturingEliminate every form of wasteEnsure workplace safetyParticipate in the economic and social life of local communities

3

2DESIGNDesign vehicles at an acceptable cost and attenuate their impact:

On the environment, by reducing their CO2 and other local emissions, using resources responsibly and improving their recyclability On society, by improving their safety performance, reducing noise pollution and easing traffic congestion

PRODUCT DEFINITIONDefine new automotive products and services aligned with:The mobility needs of consumers around the world Environmental, safety and other legislation, as well as society’s expectations in these areas

1

MARKETINGIntegrate environmental concerns into supply chain and dealership network managementResponsibly inform customers, in advertising and labelling, and ensure a satisfying ownership experience with effective sales and customer service processes

4

Retail and corporate customersConsumer associations

CUSTOMERSCIVIL SOCIETY

Motorists and other road usersOpinion leaders, such as non-governmental organisations, the media, independent experts, and financial and socially responsible investment analysts

Local authoritiesNeighboursLocal associationsLocal schools and universities

HOST COMMUNITIES

National governments and European Union authoritiesInternational organisationsUnionsPublic interest groups

INSTITUTIONS

EmployeesSuppliers and service providersDealership networksShareholders and other investorsResearch organisationsOther carmakers and joint-venture partners

PARTNERS

Translating Needs Into ProductsMeeting the sustainable development challengeThroughout their lifecycle, automobiles pose a number of environmental and social challenges, in the areas of greenhouse gas emissions, for example, or road safety. To address them successfully, PSA Peugeot Citroën has seamlessly integrated its products into a sustainable development process deployed in close cooperation with stakeholders across the automobile chain.

In addition to the dedicated programmes undertaken at every stage in a vehicle’s lifecycle, this process is also being supported by working methods based on the principles of corporate governance, social responsibility and financial transparency.

SOCIAL RESPONSIBILITYDemonstrate the highest standards in our employee relations policies: Safety and working conditions Respect for fundamental human rights Human resources planning and development Compensation

ECONOMICSDesign, build and sell products at a fair price for customers and an acceptable cost for the company and its partnersImprove organisational efficiencyTransparently inform stakeholders about our financial and social responsibility performance

GOVERNANCEComply with best corporate governance practicesEncourage every employee to embrace the principles of sustainable developmentDemand that partners comply with our environmental and social standards

DEALERSHIP

/ 47

CO2

END OF LIFEFacilitate the collection and processing of end-of-life vehicles and components by specialised providers of decontamination, recycling and resource recovery services

USEHelp to attenuate the impact of using an automobile, by promoting safer, more environmentally responsible driving practices

5

PRODUCTIONReduce the environmental impact of automobile manufacturingEliminate every form of wasteEnsure workplace safetyParticipate in the economic and social life of local communities

3

2DESIGNDesign vehicles at an acceptable cost and attenuate their impact:

On the environment, by reducing their CO2 and other local emissions, using resources responsibly and improving their recyclability On society, by improving their safety performance, reducing noise pollution and easing traffic congestion

PRODUCT DEFINITIONDefine new automotive products and services aligned with:The mobility needs of consumers around the world Environmental, safety and other legislation, as well as society’s expectations in these areas

1

MARKETINGIntegrate environmental concerns into supply chain and dealership network managementResponsibly inform customers, in advertising and labelling, and ensure a satisfying ownership experience with effective sales and customer service processes

4

Retail and corporate customersConsumer associations

CUSTOMERSCIVIL SOCIETY

Motorists and other road usersOpinion leaders, such as non-governmental organisations, the media, independent experts, and financial and socially responsible investment analysts

Local authoritiesNeighboursLocal associationsLocal schools and universities

HOST COMMUNITIES

National governments and European Union authoritiesInternational organisationsUnionsPublic interest groups

INSTITUTIONS

EmployeesSuppliers and service providersDealership networksShareholders and other investorsResearch organisationsOther carmakers and joint-venture partners

PARTNERS

Translating Needs Into ProductsMeeting the sustainable development challengeThroughout their lifecycle, automobiles pose a number of environmental and social challenges, in the areas of greenhouse gas emissions, for example, or road safety. To address them successfully, PSA Peugeot Citroën has seamlessly integrated its products into a sustainable development process deployed in close cooperation with stakeholders across the automobile chain.

In addition to the dedicated programmes undertaken at every stage in a vehicle’s lifecycle, this process is also being supported by working methods based on the principles of corporate governance, social responsibility and financial transparency.

SOCIAL RESPONSIBILITYDemonstrate the highest standards in our employee relations policies: Safety and working conditions Respect for fundamental human rights Human resources planning and development Compensation

ECONOMICSDesign, build and sell products at a fair price for customers and an acceptable cost for the company and its partnersImprove organisational efficiencyTransparently inform stakeholders about our financial and social responsibility performance

GOVERNANCEComply with best corporate governance practicesEncourage every employee to embrace the principles of sustainable developmentDemand that partners comply with our environmental and social standards

DEALERSHIP


48 / OUR COMMitMent > vehiCleS anD the enviROnment

lOW-emiSSiOn vehiCleSin 2008 More than one million vehicles emitting less than 140 grams of CO2 per km were sold worldwide, for the third year in a row.

€2.1 billion was allocated to research and development, representing 5.1% of Automobile Division revenue and an increase of €300 million over 2007.

Europe’s lowest new-car average CO2 emissions, at 140 grams per km in 2008, according to the ranking prepared by France’s Agency for the Environment and Energy Management (ADEME).

SuStainable development objective no.1

Continue to be the leading producer of low-emission vehicles–2 million vehicles emitting less than

120 grams of CO2 per km sold between 2007

and 2010.

immediate gains thanks to standard-setting powerplants –These results have been driven by extensive power train expertise, which is being constantly enhanced with the deployment of advanced tech-nological solutions in engine architecture, fuel intake systems and injection systems.

For the past decade, PSA Peugeot Citroën has been assertively downsizing its engines, enabling them to deliver the same performance in smaller, more fuel-efficient forms. In addition to the high-technology petrol engines developed in associa-tion with BMW, which reduce fuel consumption and emissions by 10 to 15%, the Group is preparing a new family of three-cylinder, 1-litre, 70 to 100 hp petrol engines that will be produced beginning 2011. The new powerplant will make it possible to offer cars that emit less than 100 grams of CO2 per km without additional technology. PSA Peugeot Citroën also remains the world’s specialist in common-rail, direct-injection diesel technology, with its HDi family delivering remarkable drivability while reducing CO2 emissions by 20% compared with the previous generation diesels and by 30% compared with petrol engines. These benefits have made the HDi one of the best selling engines in Europe, with more than 12.4 million units pro-duced between 1998 and 2008.

PSA Peugeot Citroën is stepping up its R&D commitment to develop cars that are both envi-ronmentally friendly and easily affordable. A critical objective is to reduce carbon emis-sions, with programmes being pursued in sev-eral areas, including vehicle and component weight, powerplants and aerodynamics. All of them are focused on developing efficient, reli-able solutions, aligned with the needs of each market, that together effectively address the challenge of global warming.

Reducing co2 emissions, a competitive advantage –The Group’s leadership in low emission vehicles is based on a widely marketed, constantly enhanced product range. Fifteen Peugeot and Citroën model families with versions that emit less than 130 grams of CO2 per km are currently being marketed in Europe: the Peugeot 107, 1007, 206, 207, 308, 3008, 407 and Bipper and the Citroën C1, C2, C3, C3 Picasso, C4, Xsara Picasso and Nemo. Some 921,000 vehicles emitting less than 130 grams of CO2 per km were sold in 2008, an increase of 7.4% over the year.15,000

tonnes a year thanks

to one million fuel-efficient Michelin

Energy Saver tires.

CO2 emissions from Peugeot and Citroën

vehicles have been reduced by

/ 49

Upgrading production models of the Citroën C5 Tourer with HDi 110 hp engine and particulate filter

Carbon emissions reduction in 2008

150 140 grams per km

Reducing weight to cut emissions –Weight has a direct influence on a car’s fuel effi-ciency, and therefore on its carbon emissions. That is why PSA Peugeot Citroën has made weight reduction a major factor in shrinking the environ-mental footprint of its models, while continuing to improve safety and other performance features. This commitment to making cars lighter is a key criterion in selecting vehicle design and architec-ture solutions, with a preference for those that deliver the specified features using less base material. One example is the increasing use of very stiff high-tensile steel. Teams also pay careful attention in selecting a vehicle’s base materials, particularly the metals that on average account for around 70% of its total weight. Whenever techni-cally feasible and cost effective, weight is reduced by choosing lower density materials, such as the aluminium or plastics used in the place of steel. Another source of improvement lies in the use of innovative assembly techniques, such as hot stamping and laser welding, which help to reduce car body weight while improving impact resistance.

–4.1 grams of co2 per kmBY REDUCING DRAG • Fitting a new generation of more efficient aromatic oil-free tyres• Improving aerodynamics with smaller diameter tyres, a 10 mm reduction in body width and lower clearance• Improving the tyres’ rolling resistance coefficient (RRC)

–3.5 grams of co2 per kmBY UPGRADING THE POWER STEERING SYSTEM • Replacing the conventional engine belt-driven system by electrohydraulic power steering (EHPS)

–2.4 grams of co2 per kmBY OPTIMISING THE POWER TRAIN • Extensively reworking engine drive systems and recalibrating the engine management system following the reduction in drag• Using a new low-viscosity motor oil

Further gains in fuel efficiency and carbon emissions are being driven by improvements in a variety of vehicle sub-assemblies. Equipping certain models with electronic manual gearboxes can improve fuel efficiency by up to 5%. In cooperation with suppliers, extensive work is being conducted on tyres to determine the most effective balance between dynamic performance, which contributes to active safety, and low rolling resistance, which saves fuel. To reduce drag to a minimum, aerodynamics is a key parameter in vehicle design.



bReaKthROUGh teChnOlOGieSin 2008 Presentation of HYbrid4 technology, to be introduced on premium Peugeot and Citroën models in 2011.

Further progress on developing zero-emission vehicles, led by the cooperative EV venture with Mitsubishi Motors Corp.

HYbrid4: full-hybrid diesel technology –Unveiled at the 2008 Paris Motor Show, the Peugeot Prologue and Citroën Hypnos concept cars illus-trate the current state of the Group’s full-hybrid diesel technology. Known as HYbrid4, it combines the high fuel efficiency of the HDi diesel in highway driving with all the benefits of electric propulsion on city and suburban roads. It also adds all-wheel drive capability thanks to an electric motor mounted on the rear axle assembly.

With its integrated Stop & Start system and par-ticulate filter, HYbrid4 technology delivers break-through fuel efficiency and CO2 performance, with gains of nearly 35% compared with the equivalent HDi diesel model and nearly 50% compared with a similarly rated petrol engine. Compatible with a wide array of body styles and power trains, it will be introduced on “distinctive” Peugeot and Citroën models, notably the future Citroën DS5 HYbrid4 and Peugeot 3008 HYbrid4, scheduled for launch in 2011.

electric vehicles and plug-in hybrids –A pioneer in electric vehicles with 10,000 EVs sold between 1995 and 2005, PSA Peugeot Citroën has given new impetus to its EV development programmes, in a commitment to serving a market that will initially expand through fleets and car sharing schemes.

In addition to optimising internal combustion engines, mechanical sub-assemblies and vehicle architecture, PSA Peugeot Citroën is actively working on technological solutions designed to drive powerful breakthroughs in reducing an automobile’s environmental impact. The deployment of the Stop & Start system in 2010, of hybrid solutions in 2011 and a range of zero-emission vehicles will enable the Group to consolidate its European lead-ership in the low-emission vehicle segment and to extend its expertise to other markets.

Stop & Start: micro-hybrid technology for everyone –First introduced on the Citroën C2 and C3 in 2004, PSA Peugeot Citroën’s Stop & Start system shuts down the engine when the car is standing still, thereby improving fuel economy and reducing carbon emissions in both diesel and petrol engines by up to 15% in city driving. Highly cost-effective, it is perfectly attuned to the concerns of many Peugeot and Citroën customers. In response, the technology’s second generation – featuring a more powerful, faster-starting starter-generator that allows regenerative braking – will be extended across the model line-up beginning in 2010.

pSa peugeot citRoën iS woRking on a new range of electric vehicles, whose first model will be brought to market in late 2010.

In March 2009, a new cooperation agreement was signed with Mitsubishi Motors Corp. (MMC) con-cerning the joint development of an EV for the European market based on MMC’s i MiEV car, with launch scheduled for 2010. The agreement is also designed to drive faster growth in the EV market as a whole. At the same time, to bring EVs to a wider customer base, the Group is working on a multipurpose plug-in hybrid capable of running in all-electric mode for around 50 kilometres, which corresponds to most drivers’ daily needs. Offering all the benefits of an EV, it can also shift into hybrid mode for longer distances. To support the wider use of EVs and plug-in hybrids, a partnership was formed with French power utility EDF in 2008, covering such areas as the definition of business models capable of driving the commercial de vel-opment of electric vehicles, energy storage tech-nologies, and the standardisation of recharging systems and protocols to enable vehicles and the network to communicate during recharging.

Fuel cells –PSA Peugeot Citroën is continuing its research programmes aimed at making it technically fea-sible and cost effective to develop automotive applications for fuel cell technology, which would eliminate CO2, hydrocarbon (HC), nitrogen oxide (NOx) and other tailpipe emissions. An in-house team of specialists is working on different cells and vehicle prototypes with the support of expert net-works, as part of research partnerships like the ones created with France’s National Scientific Research Centre (CNRS) and Atomic Energy Commission (CEA). The challenges involved – lowering fuel cell costs, integrating fuel cells into vehicles, and storing and distributing hydrogen – are often beyond a carmaker’s control. As a result, the Group plans to gradually introduce the technology beginning around 2020.

TAKING A LOCAL APPROACH TO ALTERNATIVE FUELS – Another way to reduce a vehicle’s carbon footprint is to develop the use of alternative fuels, whose effectiveness in improving fuel economy and fighting climate change depends to a great extent on each market’s specific characteristics. For example, the Group is already selling vehicles running on compressed natural gas (CNG) in markets where gas is a viable alternative to petrol and diesel. In 2008, it completed development of a global multipurpose 1.6-litre CNG engine

and introduced it in Iran and China. Fossil hydrocarbons can also be partially replaced by biofuels. The Group’s diesels, for example, can run on up to a 30% biodiesel blend, providing the fuel grade is high enough, while its gasoline engines can run on up to 10% ethanol blends. PSA Peugeot Citroën also enjoys extensive expertise in flex-fuel technology, which is offered on nearly 65% of its petrol-powered versions sold in Brazil. Aware of the potential conflict between using

crops for fuel instead of food, the Group is carefully tracking the research being conducted on second-generation biofuels, which use all of the plant material in today’s fuel crops as well as organic waste, such as biomass, or algae. It is committed to enabling its engines to run on these fuels as soon as they start being produced industrially, probably around 2020-2030.

tHe peugeot pRologue concept caR, unveiled at the 2008 Paris Motor Show, integrates the Group’s HYbrid4 full-hybrid diesel technology, which delivers breakthrough improvements in fuel economy and CO2 emissions. The HYbrid4-equipped Peugeot 3008 will be introduced in 2011.



SUStainable mateRialS FOR eCO-DeSiGn in 2008 Green Materials plan implemented, with each new vehicle project assigned a contractual target for percentage use.

Leadership of the collaborative MATORIA project designed to develop injection plastics made from renewable feedstocks.

an assertive commitment to using green materials –To optimise the use of resources, PSA Peugeot Citroën is focusing much of its research on poly-mers, since most of the other materials, such as metals and fluids, are already recyclable and extensively recycled. Polymers account for almost 20% of a vehicle’s total weight.

Since 2008, an ambitious plan has been deployed to increase the proportion of green materials, by weight, in a vehicle’s total polymers (excluding tyres) to 20% by 2011, from an average 6% in 2007. For the Group, green materials include three families of materials: recycled materials, natural materials (leather, wood, vegetable fibres, etc.) and biomaterials (made from renewable instead of petrochemical feedstocks). Their use offers a number of benefits, such as reducing the use of fossil plastics and fostering the development of plastics recycling processes by increasing demand. What is more, materials containing natural fibres help to make vehicles lighter, which is why they are also selected on the basis of weight. Lastly, the three families of green materi-als complement each other, because they gener-ally cannot be used together in the same application. This means that a wide variety of parts could be made with at least one of them.

PSA Peugeot Citroën teams are proficient in the eco-design process, which helps to shrink a vehicle’s environmental footprint to a minimum at every stage in its lifecycle. In addition to improving fuel efficiency and reducing carbon emissions, the process is focused on op-timising the use of natural resources by carefully selecting vehicle materials. The Group is also committed to reducing the potential environmental impact of end-of-life vehicles (ELVs) by making them easier to recycle.

designing the environment into every car –Design teams address the challenge of materials and their recyclability in the project upstream, with an initial focus on ensuring compliance with prevailing legislation. Recycling and resource recovery requirements are integrated into each new vehicle’s specifications, including the techni-cal specifications issued to equipment suppliers. This is also the case for base materials, with each new project assigned clearly defined targets as for weight, cost and other key criteria. In coordina-tion with suppliers, the project team leader regu-larly tracks progress in meeting these targets with appropriate metrics.


Sharply increase the proportion of green materials in Peugeot and Citroën vehicles–Raise the share of green materials to 20% of polymers contained in a vehicle in 2011.

BIOMATERIALS RESEARCH – The collaborative MATORIA project is aimed at speeding the development of engineered bioplastics by bringing together scientists and manufacturers from across the plastics chain, including chemical companies, plastic product manufacturers, equipment companies and carmakers. In this way, it hopes to drive the emergence of products that can replace a significant proportion of petrochemical-based plastics by 2015.

/ 53

{{WE SHOULD INSTINCTIVELY CONSIDER USING GREEN MATERIALS IN OUR PRODUCTS.We define objectives for each vehicle and work closely with suppliers. Targets for green material content are set for each sub-system and included in the contracts for each vehicle project. Working with suppliers, our technical managers and design teams track progress on meeting these targets throughout the life of the project. Since 2008, we’ve asked suppliers to propose equivalent green material content for every new part. An analysis of the producer base has identified current suppliers of natural fibres and recycled materials. Our goal is to prepare a balanced portfolio of suppliers capable of reliably meeting the Group’s green materials needs.”

LOUiS daVid / pSa peUGeOt CitROën maSteR eXpeRt, vehiCle mateRialS

gradual deployment on vehicle projects –In addition to ensuring compliance with technical and budget specifications, the wider application of green materials requires the development of robust supply chains and research on new materi-als. To meet the 20% target by 2011, the Group is actively selecting and certifying materials that offer the best cost/technical trade-off, to create a port-folio of solutions for future vehicle projects. It is also involved in a large number of scientific partner-ships to spur faster development of the biomateri-als industry and expand the use of these materials in automobiles. The commitment to stepping up their use has also led the Group to replace certain parts already fitted on production models with oth-ers containing green materials. One example is the Peugeot 207 rear view mirror support stalk, which is now made of hemp-fibre reinforced polypro-pylene instead of fibreglass.

Facilitating eco-friendly disposal of end-of-life vehicles –In designing for recycling, PSA Peugeot Citroën tries to make it easier to disassemble and decon-taminate end-of-life vehicles (ELV). It works closely with disassembly organisations, to keep them

informed of procedures that facilitate the elimina-tion of fluids and the disabling of airbag pyro-technics. It also makes sure every part is marked with standardised materials codes, so that disas-semblers know exactly what is in each one. To further assist recovery and recycling facilities, PSA Peugeot Citroën encourages the use of eas-ily recyclable materials, such as polyolefins, and tries to reduce the variety of materials to facilitate sorting after shredding. Other programmes are supporting the development of the industrial base needed to meet the Group’s recycled mate-rials needs. Thanks to this extensive commitment to recyclability, 95% of the average weight of new Peugeot and Citroën vehicles is reuseable and recoverable, as attested by certification from French testing laboratory UTAC. Of this total, 85% is actually reuseable or recyclable and 10% reflects the use of recovered resources as fuel in waste-to-energy facilities.

GREEN MATERIALS IN THE CITROËN C3 PICASSO – Green materials make up around 11% of the new Citroën C3 Picasso’s 170 kg of polymers (excluding tyres). Examples include natural fibres (photo), used to make the rear parcel shelves, boot carpeting and door insets, and recycled automotive plastics, used as raw material for mudguards.


54 / OUR COMMitMent > manUFaCtURinG anD the enviROnment

pRODUCtiOn SiteS anD the enviROnmentin 2008 Energy and water consumption and waste production all declined as a result of measures taken across the Group and the sudden collapse in demand in the second half.

ORGE, an interactive reporting and management application, was made available to environmental compliance officers worldwide.

by a dedicated service and correspondents appointed in each workshop and facility. The technical department also has environmental specialists who provide technical support for the plants, particularly during new capital projects. Through these programmes, nearly 500 people are involved in the Group’s environmental man-agement on a daily basis.

PSA Peugeot Citroën’s environmental manage-ment system, based on ISO 14001, has been introduced at all production facilities worldwide. As of end-2007, all facilities were certified to the internationally recognised standard for environ-mental management and organisation. As part of this process, all employees – including contractors, interns, temporary employees and employees hired under permanent or fixed-term contracts – take part in environmental training or awareness programmes tailored to their particular function in the Group. Widespread deployment of Lean prin-ciples, like good practice sharing, also helps improve environmental performance.

limiting emissions –Reducing emissions of all regulated contaminants is a priority for PSA Peugeot Citroën. In automobile manufacturing, paint shops are responsible for the most significant amount of emissions, notably volatile organic compounds (VOCs) from solvents.

In response to the environmental challenges of automobile manufacturing, the Group has for many years pursued a strategy of continuous improvement. Employees are deeply involved in this strategy, which has been deployed worldwide. Now, the Group is focusing on issues raised by operations in its technical and administrative centres, replacement parts facil-ities, dealership networks and other units.

industrial environment governance –Series production, which is carried out at sites located primarily in suburban industrial parks, has an inherent environmental impact. In addition to complying with national and local regulations and safeguarding the neighbouring environment and the quality of life in host communities, PSA Peugeot Citroën has long been engaged in assertive envi-ronmental stewardship at its production facilities worldwide, again with a focus on continuous improvement. This requires a disciplined organi-sation, appropriate resources and a methodology based on the ISO 14001 environmental standard. A corporate-level Industrial Environment Section leads and coordinates general activities in this area and manages the ORGE application, with its own capital budget. In addition, at each plant, an environmental compliance officer is backed


Reduce the average energy used per vehicle produced in our manufacturing facilities–2.1 MWh / car in 2010.

500 employees are involved

in environmental management throughout

the Group.

/ 55

BRAzIL

CHINA

ARGENTINA

Porto Real

JeppenerBuenos Aires

Xiangfan*Wuhan*

FACILITIES IN THE PARIS AREASaint-Ouen Aulnay-sous-Bois Poissy Asnières-sur-Seine

FRANCE

ITALY

CzECH REPUBLIC

SLOVAkIA

RUSSIA

SPAIN

PORTUGAL

MulhouseSochaux

Sept-Fons

Hérimoncourt

Metz

Douvrin*(Française de Mécanique) Valenciennes

Hordain(Sevelnord*)

TrémeryCaen

Kaluga

Rennes

Kolín*

Trnava

Vigo

Mangualde

Madrid

Val di Sangro(Sevelsud*)

Charleville-Mézières

Paris

PROdUCtiOn FaCiLitieS all pSa peugeot Citroën sites are certified to iSO 14001

Automobile production centres

Mechanical components plants and foundries

Production facility under construction

* Joint ventures /cooperation(all these sites are certified to ISO 14001).


56 / OUR COMMitMent > manUFaCtURinG anD the enviROnment

Reducing energy use and gHg emissions –A number of processes in automobile manufac-turing, such as casting and paint curing, are par-ticularly energy intensive. The Group has improved its energy profile over the past few years by deploying an energy management plan, upgrading its power plants to run on natural gas instead of fuel oil and implementing cogeneration systems. This plan reduced greenhouse gas emissions (mainly CO2) per vehicle by around 40% between 1995 and 2008.

carefully managing water use and effluent –Water use is also carefully managed through wide-spread metering, the promotion of water-saving practices and the deployment of recycling sys-tems. These measures have helped to reduce water consumption per vehicle produced by more than 60% since 1995. Production facilities are either connected to the public wastewater treat-ment network or equipped with their own inte-grated treatment plant. The facilities also systematically track releases using indicators defined in their operating permits to ensure com-patibility with the surrounding environment.

To reduce these emissions, the Group is taking assertive action in several areas. This includes:• Optimising paint shops by introducing equip-ment with higher application efficiency to reduce the use of conventional paints and related sol-vents, by selecting low-solvent paints and by recycling used solvents.• Deploying clean technologies like water-based paints and powder primers.• Installing air treatment equipment that incinerates VOCs.• Encouraging the sharing of experience and good practices among Group plants.

Thanks to these measures, per-vehicle VOC emissions from Group assembly plants have been halved in less than 15 years. In addition, each facility meets the limits set in the European Union directive on reducing VOC emissions, which took effect in October 2007.

As for other contaminants, the Group replaces conventional high-sulphur fuel oil with low-sul-phur fuels and natural gas whenever possible. This move, combined with greater use of co-generated steam, has resulted in a spectacular decline in NO2 and SO2 emissions since 1995, with reductions of 43% and 99%, respectively, over the period.

4 kg per vehicle: This is the Group’s

goal, to be achieved by implementing

the best, most cost-effective technologies.

volatile oRganic compound (voc) emiSSionSRatio (in kg/painted vehicle) –

1995 20082006 2007

8.33

4.88

4.39

4.13

wateR iS a cRitical ReSouRce. To preserve water quality, each site is equipped with a treatment unit or connected to a wastewater treatment system.

/ 57

Reducing and efficiently recovering waste –In the same way that it has worked to make its end-of-life vehicles more fully recyclable, the Group has applied a policy to reduce, recycle and recover its industrial waste for more than ten years now. These measures have produced tan-gible results. The amount of non-metal waste per vehicle produced, for example, has declined by around 25% since 1995, while the amount of waste reclaimed and recovered has risen to 82%. At the same time, landfilled waste has steadily declined. Nearly all scrap sheet metal, turnings and other metal waste is recovered and reused in steelmaking or in the Group’s found-ries. Taking this category of waste into account, Group plants reclaim and recycle a steady 94% of their process waste.

managing significant impacts from other sites –In addition to its efforts at production units, the Group has taken measures to reduce the most significant environmental impacts from other sites, including replacement parts facilities, R&D and administrative centres, and the Peugeot and Citroën dealership networks. In 2007, it extended

its ISO 14001 certification programme to the Vesoul replacement parts facility and the La Garenne technical centre. Next up will be the Belchamp and Vélizy centres.

As part of its environmental programme, the La Garenne site has received new equipment that reduces the amount of water needed to cool test benches. Thanks to its water recycling sys-tem, the site has reduced its withdrawals from the urban network by 90%. PSA Peugeot Citroën has also taken steps to optimise paper use by printing only when necessary and facilitating wastepaper recycling. An action plan has been implemented to develop and deploy an international scorecard of good environmental and social practices in the Peugeot and Citroën networks, notably to manage waste, environmental disturbances and natural resource use more effectively.

Citroën France introduced its GreenPact environmental approach at the 2008 Paris Motor Show. GreenPact is designed to help the French dealer network keep up with changing legislation and continuously improve the way it handles environmental impacts (waste management, storage of chemical products, traceability of end- of-life parts, etc.). To do this, GreenPact leverages a full range of communication resources—including a website, an environmental guide, a magazine, a newsletter and information meetings—and facilitates contacts between the network and other specialised players, such as organisations that collect and treat end-of-life vehicles, parts or coolants. Just a few months after GreenPact was launched, 97% of Citroën’s 2,300 French dealers had signed on to the approach.

CITROËN FRANCE LAUNCHES GREENPACT –

{{I MAKE SURE THAT THE RENNES SITE’S ENVIRONMENTAL POLICY IS APPLIED PROPERLY on a day-to-day basis, at each stage of the production process and when new manufacturing projects are launched. I am assisted by a dedicated team of ten people. In addition to ensuring compliance with legal requirements, we are responsible for leading action plans that will improve the site’s environmental performance. An example is the “zero waste” policy in the assembly shop. In leading such programmes and conducting awareness campaigns, I quite naturally come into contact with all staff members, as well as contractors. Our approach also involves maintaining close ties with local players such as the Regional Authority for Industry, Research and the Environment (DRIRE) and the water board and raising awareness among external stakeholders like the Chamber of Commerce and local schools.”

CaROLe giLLet / enviROnmental COmplianCe OFFiCeR, RenneS


58 / OUR COMMitMent > SOCial ReSpOnSibility

OUR SOCial ReSpOnSibilityin 2008Nearly 201,700 employees worldwide, including nearly 130,000 in the Automobile Division.

More than 93,000 employees outside France.

Charter, Transfer Opportunity Centres and Place-ment Fairs and Offices, were also implemented during the year.

Responsibly managing jobs and capabilities –As in 2007, the Group chose to lead these align-ment programmes with a strong commitment to maintaining social cohesion. To avoid dismissals or early-retirement schemes, the redeployment of jobs and capabilities was based on voluntary par-ticipation in initiatives designed to move forward future separations for such reasons as full-time retirement, change of profession, retraining leave, transfers or outplacement.

In France, Spain, Germany, Portugal, Argentina, China and other countries, these initiatives were negotiated in advance with unions or developed from human resources planning and development agree-ments. Together, these plans and programmes result-ed in the separation of 6,150 employees in 2008.

Another 6,120 separations are scheduled for 2009, of which 3,550 will be covered by the voluntary capabilities redeployment plan announced in December 2008. In addition, 900 operators at the Rennes plant will be transferred to other facilities. The entire downsizing process is being carried out in a socially responsible manner, with a full range of employee support measures.

Built on a strong commitment to social cohesion, PSA Peugeot Citroën’s human resources policies are designed to continuously enhance the or-ga nisation’s performance and competitiveness.

Responding to a difficult business environment –The financial and manufacturing crisis has led to a major reduction in unit sales, prompting the Group to implement a variety of measures to align production volumes with demand. In France, short-time work totalled nearly 4,400,000 hours in the Automobile Division, with the vari-able work scheduling agreement helping to main-tain compensation levels. Application of the agreement, which was signed in 2005, makes it possible to keep short-time employees at full salary for up to 25 unworked days, thanks to the partial compensation of overtime already worked. Plants outside France also used un-worked days, maintaining compensation levels through variable work scheduling agreements, which include time banks.

Internal mobility was also encouraged in order to redeploy capabilities and the workforce, thereby preserving jobs. As part of this process, 10% of worldwide employees and 22% of managers changed jobs in 2008. To support this dynamic, a number of new initiatives, such as the Mobility

4,100 courses in the employee training

catalogue. Every year, employees have

the opportunity to discuss their training

needs during one or more reviews with

their manager.

/ 59

been created to support dialogue and discussion with employee representatives:– The Joint Union Management Strategy Committee closely examines topics related to the company’s situation and to policies and strategies deployed.– The Skills and Capabilities Observatory provides an effective, forward-looking vision of the Group’s skills-sets. It has also identified strategic automotive skills.

nurturing human capital –Training courses and programmes enable employ-ees to develop their technical or managerial skills and expand their career opportunities. In 2008, they could choose from among nearly 4,100 mod-ules in the training catalogue. Major technical or managerial projects are supported by employee training designed to instil the necessary skills and abilities. Line operators, for example, are trained in the technological innovations introduced with the launch of new vehicles or drivetrains.

As well, managers and supervisors in the manu-facturing operations attend classes in the princi-ples of the Group’s production system.

All of the divisions have implemented work meth-ods based on the principles of Lean Management. As part of this process, a Lean Management school was created in 2008 to help divisions to deploy their training programmes.

preparing the future through training –The current crisis and the related production slow-downs provide an opportunity to pursue training programmes, in particular to better prepare the transformation in core competencies and the development of the Lean Everywhere culture. A major training initiative involving 70 hours per person in the Automobile Division will be offered to employees on short-time work, then extended to the entire workforce. In early 2009, the Group signed an agreement making it possible to train employees on days of short-time work to develop their skills and enable the company to emerge from the crisis more competitive than before.

preparing for tomorrow’s jobs and capabilities –The Group’s expertise and capabilities are man-aged both quantitatively and qualitatively through 21 global, cross-operations job tracks, which pro-vide a forward-looking vision of tomorrow’s skills-sets. For each one, a list of positions has been identified so as to improve the human resources planning and development process. To proac-tively respond to an evolving skills base, manage these skills more effectively and improve employee visibility of over-the-horizon technologies and manufacturing processes, two organisations have

{{PSA PEUGEOT CITROËN’S SOCIAL RESPONSIBILITY COMMITMENT IS A REAL ADVANTAGE IN DEVELOPING OUR SKILLS. By making the responsible management of jobs an absolute priority, by preparing for the future with the development of our diversity and capabilities, and by making training and the demonstration of new managerial attitudes core drivers in improving the Group’s performance, we will emerge from the current crisis stronger and more competitive than ever. This is the way we will successfully meet the challenges that await us, while maintaining the company’s social cohesion.”

deniS MaRtin / eXeCUtive viCe-pReSiDent, hUman ReSOURCeS

22% of managers changed positions in 2008. Employees can

view job vacancies in the Group and post

their résumés on the Human Resources

intranet. Other measures to facilitate internal

mobility include workshops on how to

write a résumé or prepare for a successful

job interview, and the organisation of

transfer forums where employees can

meet with representatives from corporate

departments and divisions.


Extend PSA Peugeot Citroën’s social responsibility commitment worldwide


Action plans to prevent psychosocial risks PSA Peugeot Citroën is committed to preventing psychosocial risks and stress in the workplace. Early detection and intervention units have been set up at every facility and a toll-free psychological assistance and support hotline is available for employees in distress. In 2008, a study was con-ducted to assess key stress factors and determine how stressed employees actually feel. These assessment and tracking systems have enabled the deployment of appropriate action plans.

Extending compliance with labour and safety practices to our partners Compliance with the Group’s labour and safety practices is being extended to outside contractors and temporary employment agencies, with a Group-wide procedure clearly defining the applicable labour and safety standards and requirements. Guidelines for selecting contractors, integrating their teams, coordinating projects and ensuring buyer accountability have been established and compliance is being tracked by audits.

Building employee safe driving awareness As a carmaker, PSA Peugeot Citroën pays spe-cial attention to preventing road accidents. In association with employee representatives, an occupational road risk prevention manual has been prepared, to offer employees guidelines on how to avoid an accident and on how to use their cars when travelling on business or com-muting. It is supported by an action plan that is being gradually deployed in all of the Group’s facilities and offices.

improving working conditions, ensuring employee safety –A total commitment to workplace safety Now deployed at every plant and facility worldwide, the integrated Workplace Safety Management System ensures that executives, managers, employees and employee representatives all feel responsible and accountable for improving safety and preventing accidents. The Workplace Safety Management System and the deployment of the STOP risk-observation procedure have led to the development of a prevention policy for assessing risks, handling malfunctions, deploying an early-warning procedure and launching improvement actions. The lost-time incident frequency rate stood at 3.43 in 2008.

tHe “little dRiveRS” daYcaRe centRe in vÉliZYPSA Peugeot Citroën offers company daycare centres to enable employees of the Group and nearby companies to enhance their work/life balance.

The only acceptable target is zero accidents. While the lost-time incident frequency

rate improved to 3.43 in 2008, the result

is still not satisfactory.

total loSt-time incident FReQuencY Rate Manufacturing, office, R&D and sales units, excluding Gefco and Faurecia –

2003 20062004 20072005 2008

6.36

5.064.40

3.41 3.72 3.43

/ 61

An active commitment to healthEmployee health is a challenge for both business and society as a whole. As part of its commitment to keeping employees healthy, the Group imple-mented a Health Care Plan that is monitored every year. Job-related diseases are covered by prevention programmes that, for example, are improving workstation ergonomics to attenuate musculoskeletal disorders (MSDs). In the same way, the Group’s medical teams are involved in preventing certain diseases and diagnosing non-work related risk factors capable of negatively impacting employee health. They also provide regular screening for glaucoma, certain types of cancer and hepatitis C.

Improving working conditions and employability PSA Peugeot Citroën ensures that every employee works in an environment meeting the highest standards. Production line workstation ergonomics are being improved using the METEO method. This process, which is being led by multi disciplinary teams of occupational physi-cians, engineers, safety technicians, ergono-mists and managers, is helping to significantly reduce the hardship of certain workstations. In the Automobile Division, the priority is to reduce the number of workstations rated as “heavy.” Between 1999 and year-end 2008, their percent-age declined from 35% to 11% of the total, while the percentage of “light” workstations increased from 26% to 49%. Light workstations foster the employability of people of all ages by enabling employees with a number of medical restrictions to remain on the job. In addition, the Group makes sure that workspaces comply with the highest standards of quality. Some units offer services to help employees improve their work/life balance, such as flexible working hours and employee assistance services, like corporate concierge services, company daycare centres, and company sponsored social, sports and cultural activities. In April 2008, PSA Peugeot Citroën signed the French government’s Working Parents Rights Charter, thereby pledging to create a favourable environment for working par-ents, especially for pregnant women, to give them a greater voice within the organisation and to apply the principles of non-discrimination with regard to their career development.

A SAFETY-DRIVEN SHOPFLOOR–In 2008, the Trnava plant in Slovakia improved its safety performance, reducing its lost-time incident frequency rate to 2.08 from 3.23 in 2007. The recordable incident frequency rate also declined, to 15.1. During the year, safety and ergonomic concerns were integrated into plant work standards. At all levels of the organisation, safety committees responsible for defining and monitoring safety improvement plans meet regularly with employee representatives. The plant also organised a Safety Week event, during which managers conducted a series of comparative assessments to identify areas of improvement in their fellow managers’ sector of responsibility. Special contests have helped to highlight best prevention practices and performance.



In addition to across-the-board raises, merit raises are awarded every year to individual employees in every job category. The processes for setting compensation levels are closely tracked to pre-vent discrimination. All employees are paid an incentive bonus through the discretionary profit-sharing system. In addition, executives who make a critical contribution to Group performance receive supplemental compensation, reflecting a commitment to encouraging a results-orientated culture and to offering competitive compensation aligned with market practices.

Enabling employees to share in the value they create All employees around the world are paid a discre-tionary profit-share out of operating income. In 2009, €11 million will be distributed to Automobile, Finance and Transportation & Logistics Division employees in the form of discretionary and non-discretionary profit-shares for 2008, a year that was shaped by a very unfavourable business environment. To give employees a stake in their company’s performance and provide support for their personal projects, a variety of company sav-ings plans have also been put into place in the host countries.

Actively-managed, open-ended, personalised career pathsThe use of tools based on skills assessment, indi-vidual performance and objective selection meth-ods has been extended across the global organisation. An agreement signed on 16 January 2009 will offer administrative employees, techni-cians and supervisors new career opportunities

aligning performance, competitiveness and personal growth –A large number of new agreements In 2008, 240 agreements covering major issues concerning the Group and its employees were signed, including 140 outside France. Contractual commitments address employee expectations about working terms and conditions and also drive changes in corporate culture and mindsets by tak-ing other social issues into account.

Employee participation and social dialogue in the workplaceTo facilitate team management and dialogue, all of the Group’s production plants have been organised into Basic Production Units, whose operating procedures are based on employee participation. In line with this model, Basic Design Units have also been set up in all research and development facilities and departments. Similarly, participatory approaches encourage employee initiatives to promote continuous improvement.

Competitive, performance-based compensation In every host country, compensation policies are designed to maintain employee purchasing power, while rewarding performance, offering compensa-tion that is competitive with market practices and giving employees a stake in the value they help to create. In 2008, more than 50 agreements were signed with employee representatives worldwide.

PRESERVING EMPLOYEES’ PURCHASING POWER– In every host country, compensation policies are designed to reward performance and offer compensation that is competitive with market practices. The minimum wage offered by the Group in each country is equal to or higher than the local statutory minimum wage.

Social dialogue is organised using a “social agenda” to prepare working sessions with employee representatives.

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on international assignments. To anticipate future needs and more effectively respond to requests for secondment abroad, a dedicated support system has been introduced for the employees concerned.

based on their job proficiency and performance. With the two agreements previously signed cov-ering career development for production operators and other skilled workers, this means that the careers of operators, other skilled workers, admin-istrative employees, technicians and supervisors are now structured by three major agreements. This approach is being gradually extended to every host country, such as Spain for operators and the United Kingdom for administrative employees, technicians and supervisors.

For managers, the individual career manage-ment process is informed by an understanding of their aspirations, results, capabilities and past experience. In addition to ongoing discussions with their direct supervisors, managers have the chance to review their career opportunities at annual Careers Committee meetings organised in every department. These Committees also help to identify high potential managers in a selection process that reflects the growing diver-sity and globalisation of the Group’s managers and experts. At the Group’s Institut Supérieur du Management, high-potential managers attend management courses aligned with their future duties while pursuing career paths that broaden their responsibilities.

International mobility To more efficiently manage employees sec-onded to international postings and to capitalise on their international experience, an Interna-tional Mobility Committee comprising human resources managers was set up in 2008. During the year, 765 employees of all nationalities were

gRoup woRkFoRce –

Administrative employees,

technicians and supervisors

26%

Managers 17%

Operators 57%

> By job category

France 54%

Rest of the world 13%

Rest of Europe 33%

> By region

in liaiSon witH emploYee RepReSentativeS, the Skills and Capabilities Observatory provides an effective, forward-looking vision of the Group’s skills-sets, making it possible to identify areas of key strategic importance.



Promoting job opportunities In France, vocational training partnerships with national education systems are supporting a wide variety of programmes to prepare young people for careers in automotive manufacturing and sales and to help bring them into the workforce with job-oriented training curricula. The 2008 Diversity and Social Cohesion Agreement includes a section on fostering job opportunities for people often excluded from the workforce by supporting targeted initiatives for the disabled, young people and marginalised individuals who need help getting back into the job market.

Guaranteeing gender equality in the workplace A gender-balanced workforce is beneficial to the Group’s performance. In 2008, French quality standards agency AFAQ AFNOR Certification renewed the Group’s “Equal Opportunity Employer” label, based on its assertive gender equality poli-cies and their compelling results. The agency rec-ognised that these policies had delivered significant gains in offering job opportunities for women, developing a gender-balanced workforce, ensuring equal pay for equal work, providing equal career opportunities and promoting initiatives to improve work/life balance, such as flexible work-ing hours and near-site services.

As part of a process to detect and develop future executives, a Mobility Committee identifies high-potential individuals throughout the Group and works with them to devise personalised career paths. In 2008, 9% of these high potentials were women, compared with 5% in 2007. Two of the nine Executive Committee members are also women.

ensuring equal opportunity and promoting diversity –PSA Peugeot Citroën needs to become more global, both geographically and in the make-up of its teams. Nurturing a broad range of skills from diverse backgrounds in-house ensures that the Group more effectively reflects the diversity of all its customers. PSA Peugeot Citroën applies best practices in the fight against racism, xeno-phobia, homophobia and, more generally, any and all forms of intolerance towards people who are different. It also guarantees respect for an employee’s private life. In France, Spain and the United Kingdom, joint labour-management diver-sity and equal opportunity oversight committees have been created to monitor effective applica-tion of agreements. In France, the committee verifies that merit raises and promotions are awarded in the same proportions as the different categories tracked across the organisation.

After four years of substantial, extensive prog-ress, a new Diversity and Social Cohesion Agree-ment was signed on 6 October 2008. PSA Peugeot Citroën was awarded the AFNOR Diversity Label in recognition of its commitment to equal oppor-tunity and preventing discrimination. This com-mitment has been extended to operations outside France under the Global Framework Agreement on Social Responsibility.

170social integration programmes were carried

out in France in 2008. One involved hiring

24 disadvantaged early school leavers under

skills-acquisition contracts with assistance

from the French Adult Training Association

(AFPA), the state-run employment agency

and the Vesoul local employment office.

a widelY RecogniSed Social policY

pSa peugeot citRoën was one of the first companies in France to sign agreements on equal opportunity (2003) and diversity (2004).

/ 65

expertise by continuing to offer them real oppor-tunities for personal growth in the years until they retire, and increasing their salary accordingly. To guarantee compliance, performance indicators, such as raises, training opportunities and career orientation reviews, are regularly analysed with employee representatives.

Ensuring the disabled have equal access to the workplace Committed to hiring and retaining disabled employ-ees, PSA Peugeot Citroën currently employs more than 6,300 disabled people in its Automobile, Finance and Transportation & Logistics Divisions. To broaden this commitment, the Group has helped to develop and launch hanploi.com, a French job search website for the disabled.

An agreement signed on 21 July 2008 has renewed and improved the 22 September 2005 agreement designed to help disabled employees retain their jobs, prevent disabilities and enable the disabled to play a productive role in the workplace. It has given further impetus to policies in this area and raised awareness across the organisation of the need to integrate and recognise the contribution of disabled employees. The agreement supports other initiatives to promote equal opportunity within the organisation. Similar agreements have been signed in Argentina and Brazil.

In the Automobile Division in France, more than 8% of employees are classified as handicapped (including sheltered workers under contract), compared with the 6% national rate that busi-nesses are encouraged to reach.

Retaining and motivating older employees Employees over 50 make up around 22% of the consolidated workforce. Retaining and motivating these “seniors” is one of the socially responsible commitments described in the Global Framework Agreement on Social Responsibility and the diversity and equal opportunity agreements. It is based on rightly recognising their experience and

10.5% of the high-potential managers

identified in 2008 came from outside

France versus 8.5% in 2007.

30% of managers

under 30 are women.

peRcentage oF women in tHe woRkFoRce (worldwide) –

2002 20082004 2006

17.6 19

.8

20.6 21

.6

MODIFICATIONS SUCH AS THE INSTALLATION OF SIDEWALK RAMPS have made it easy for me to access my workstation, but more importantly, having a job that suits my handicap is a real morale boost.”

LETITIA POINT / archivist at the Metz plant

{{



human rights abuses, freedom of association, the recognition of the right to collective bargaining, the elimination of all forms of forced and compul-sory labour, the abolition of child labour, the elim-ination of discrimination in hiring and career development, the fight against corrupt practices and the prevention of conflicts of interest.

PSA Peugeot Citroën intends to make compliance with its social responsibility practices a core com-ponent of its purchasing policy. In fact, compli-ance with the principles of the International Labour Organisation is one of the key criteria in the sup-plier approval process, and non-compliance can result in removal from the Group’s suppliers list. A detailed guide specifying the Group’s social responsibility and environmental requirements has been sent to its 1,000 largest suppliers in order to obtain a formal commitment from them.

implementing best practices worldwide

– PSA Peugeot Citroën ensures that best human resources management practices are applied in all of its host countries, paying special attention to social and corporate citizenship issues. Examples of the numerous initiatives undertaken around the world include the recent creation of a works coun-cil in Algeria, the implementation of human rights training in Slovakia, Poland and Brazil, and the introduction of consultation and tracking proce-dures in Russia.

upholding and promoting human rights –PSA Peugeot Citroën is committed to growth founded on socially responsible principles and practices, consistently applied in every host coun-try and business around the world. In 2003, the Group pledged to uphold and promote the ten principles of the United Nations Global Compact, which are based on the Universal Declaration of Human Rights, the International Labour Organisa-tion’s Declaration on Fundamental Principles and Rights at Work and the United Nations Convention Against Corruption. PSA Peugeot Citroën also actively supports employee freedom of associa-tion and representation around the world and is committed to respecting the independence and pluralism of trade unions.

In 2006, the Global Framework Agreement on Social Responsibility was signed with the Inter-national Metalworkers’ Federation (IMF), the European Metalworkers’ Federation (EMF) and other unions in the major host countries. Engag-ing both the Group and nearly 85 unions, the Agreement has formalised PSA Peugeot Citroën’s commitments in favour of fundamental human rights, good human resources practices and compliance of production partners, suppliers, dealer networks and host communities with the Group’s social responsibility practices.

The Agreement covers support and promotion of human rights, refusal to accept complicity in

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relations information and compliance with the Group’s social responsibility commitments. In 2008, 19 facilities or units were audited, with a focus on application of the Global Framework Agreement on Social Responsibility, hiring procedures and non-discrimination practices.

A more detailed presentation of the employee relations indica-tors may be found in the “Social and Society” chapter of the 2008 Sustainable Development Performance Indicators supplement.

The Global Framework Agreement on Social Responsibility also covers the Group’s contribu-tion to the economic and social development of host communities, in particular by using and training local human resources whenever pos-sible and cooperating with local authorities.

Forging training partnerships in host countries and communities PSA Peugeot Citroën has formed a large number of partnerships with national employment and vocational training agencies, as well as with social integration associations. The Group signed the French Charter of Companies Supporting Equal Opportunity in Education in 2008 and has worked with France’s National Education Ministry and local partners to set up training centres special-ised in manufacturing and sales in Brazil, China, Mexico and Slovakia. In addition, at Citroën’s request, technical “teachers without borders” regularly conduct one-off training programmes in 11 countries, including Cameroon, Madagascar, Tunisia and Turkey.

Using audits to gauge progress Each year, data are reported by every subsidiary around the world via a dedicated social reporting system to comply with France’s NRE legislation and Global Reporting Initiative guidelines. With the creation of an internal social audit process in 2005, the Group strengthened its procedures for verifying compliance with legal and regulatory standards, contractual commitments and social responsibility principles. In addition to the internal audit process, external auditors verify employee

THE GLOBAL FRAMEWORK AGREEMENT ON SOCIAL RESPONSIBILITY– Local employee relations oversight committees, composed of human resources managers and union representatives, have been set up in the Group’s main host countries. Each year, action plans are prepared to improve compliance with the commitments expressed in the Global Framework Agreement on Social Responsibility. The plans are drawn up locally to ensure that they meet the specific needs of each country. The oversight committees perform an annual review of these action plans and of the Agreement’s application in each subsidiary, and a Group-wide report is presented to the Extended European Works Council. This process ensures that PSA Peugeot Citroën continues to fulfil its commitments to fundamental human rights, good human resources practices and social responsibility standards on an ongoing basis.

68 / OUR COMMitMent > CORpORate CitizenShip

innOvatinG FOR SaFeR mObilityin 2008Two new models, the Citroën C5 and Peugeot 308 CC, earned the maximum five-star rating in Euro NCAP tests.

A new remote fleet management service called Active Fleet Data was launched.

cial vehicles, from budget to executive ranges. To prevent accidents (primary or active safety), the Group’s vehicles are designed to compensate as much as possible for bad driving, faulty infra-structure and adverse weather conditions. Their architecture is engineered to deliver handling performance, precision steering and braking power that rank among the best in the market. Moreover, in emergency situations, they offer such driver assistance technologies as antiblocking systems (ABS), emergency braking assist (EBA), lane departure warning systems and electronic stability programs (ESP), which help drivers main-tain control even in a skid.

In the event of an impact, the passenger compart-ment is designed to act as a survival cell to pro-tect the vehicle’s occupants (secondary or passive safety), with appropriate restraint sys-tems including Isofix attachment points for child seats, seatbelt load limiting retractors and dual-stage airbags. The Group’s expertise in this area is illustrated by the maximum five-star rating for adult occupant protection awarded by the inde-pendent organisation Euro NCAP to 13 Peugeot and Citroën models. Starting in 2009, the Group’s models will be subject to the new Euro NCAP assessment process alongside vehicles from competing brands. The overall rating will take into account the vehicle’s performance in terms of adult, pedestrian and child protection, as well as the presence of on-board driver assistance sys-tems such as ESP. The Group aims to provide all of its new models with the highest standards of protection in case of an accident.

PSA Peugeot Citroën has considered the safety of all road users to be a top priority for many years, a position that has enabled it to develop some of the safest vehicles in the world. The Group intends to further improve safety thanks to its unique expertise in the field of automotive telematics, which has already been illustrated by the emergency call system. Its goal is to con-tinue to deploy new equipment and services to offer mobility that increasingly combines safety and environmental protection.

preventing accidents and protecting victims –Improvements in safety are rolled out across the entire line-up of Peugeot and Citroën models, including both passenger cars and light commer-

eFFicient ReScue opeRationS: Victim removal instructions developed by the Group facilitate the job of rescue workers after an accident.


Broadly deploy telematics services to improve user safety–1 million enabled vehicles on the road in 10 European countries by 2011.

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{{PSA PEUGEOT CITROËN’S EMERGENCY CALL SYSTEM is free, requires no subscription and has no cut-off date. The Group’s unique experience in deploying this technology in Europe has put it in a position to offer new telematics services for consumers and professional drivers. As these services become more widespread, they will improve road safety, enhance mobility and deliver environmental benefits.”

FRanCk BatOCChi / telematiCS eXpeRt at pSa peUGeOt CitROën

leader in emergency call systems –PSA Peugeot Citroën has played a pioneering role in post-accident or tertiary safety, which helps to attenuate the effects of an accident by facilitating emergency rescue and shortening response times. It is the only volume carmaker to deploy a wide-scale, location-aware emergency call sys-tem, free of charge and without any cut-off date. At end-2008, 650,000 Peugeots and Citroëns on the road in Europe were equipped with the system. Of these, 550,000 benefited from the premium* service, available in nine European countries.

In the event of an accident or medical emergency in the car, occupants can alert a dedicated assist-ance centre simply by pressing the SOS button. In the case of a collision, the same alert is sent automatically. Thanks to the car’s GPS system and on-board GSM mobile phone, assistance person-nel can pinpoint the car’s location, thereby enabling rescue services to respond more quickly and effectively. More than 2,700 emergency alerts have been sent to local rescue services since the service was introduced in 2003.

telematics for more effective mobility management –The widespread deployment of the emergency call system has allowed PSA Peugeot Citroën to build and master a technical architecture that can now be

used to support an ambitious strategy in telematics. Its new services are designed to make mobility more efficient and environmentally friendly. Since 2002, Peugeot and Citroën have set up a range of assist-ance services based on the shared RTx/NaviDrive telematics platform that offer, in a single unit, a radio, CD player, GSM hands-free telephone and GPS navigation system. Thanks to the GPS system, cus-tomers benefit from much faster roadside assist-ance, including repairs and towing service. At Peugeot, the “Services Mobiles” mobility assistance service launched in 2007 allows users to set up traf-fic warnings on pre-set routes and download sug-gested routes that have been optimised for current traffic conditions. By rationalising their trips, drivers help reduce their vehicles’ environmental impact.

In 2008, Peugeot and Citroën introduced the Active Fleet Data service for remote fleet management. The service transmits regular, precise data on vehicle performance without driver intervention through a unit installed after sale. Twice a week, the interp@rc software provides updates on kilometre readings, the number of kilometres before next inspection and other general parameters, as well as diagnostics for mechanical components such as the gearbox and emissions control system. Fleet managers are alerted in real time by e-mail if the system detects mechanical or safety issues such as low oil, worn brake pads or underinflated tyres. By promoting regular maintenance, the Active Fleet Data service also helps reduce environmental impact.

* When the vehicle is not in one of the nine countries where the premium call service is available, it calls Europe’s 112 emergency number, which is not location-aware.

witH gRip contRol on tHe peugeot 3008 and Snow motion on tHe citRoën c5, the Group offers smart systems for enhanced traction.

2,500 lives a year in Europe.

According to the European Commission,

equipping every vehicle on the road

with the emergency call system would save



SUpplieR RelatiOnSin 2008305 suppliers, representing 71% of worldwide standard parts purchases, committed themselves to the Group’s environmental and social requirements.

The Purchasing Business School, an in-house training programme for purchasing excellence, was launched.

take advantage of the downturn in raw material prices, after weathering five years of negative price impact.

Recognising suppliers’ performance –As part of its win-win approach, PSA Peugeot Citroën has built special relationships with a select group of strategic suppliers who are involved in its strategic choices further upstream. This type of skills sharing allows each partner to make the most of its innovation capabilities. In the area of environmental solutions, for example, the Group is involved in large-scale partnerships with Valeo on the Stop & Start system, Bosch on HYbrid4 technology and Michelin on fuel-efficient Energy Saver tyres. To nurture relationships of trust, the Group also awards trophies to both large and small suppliers each year for outstanding efforts in quality, innovation, parts and service and cost performance. The fifth awards ceremony was held in March 2009.

making sustainable development part of purchasing –Cost is not the only factor when it comes to taking relations with suppliers to a higher level. For this to happen, suppliers must comply with social and

PSA Peugeot Citroën knows that solid ties with suppliers are key to meeting its strategic objectives. Suppliers are deeply involved in the Group’s efforts to reduce costs, improve qual-ity and drive innovation. To maintain lasting, mutually beneficial relations, the Group has lent suppliers a helping hand during the reces-sion and encouraged their efforts in the area of social and environmental responsibility.

Facing the recession together –The entire automobile industry, from carmakers to automotive equipment suppliers, has been hit by the cash crunch and plummeting demand. One of PSA Peugeot Citroën’s priorities in this environ-ment is to secure its supplies and support its sup-pliers so as to ward off the most critical situations upstream. To give suppliers more breathing room, the Group has paid invoices more quickly (a move that represents €1.3 billion in assistance) and contributed €200 million to France’s Automobile Industry Investment Fund (FMEA). In addition, the Purchasing Department has put together an expanded team of technical, financial and human resources experts to manage day-to-day relations with suppliers in difficulty.

At the same time, PSA Peugeot Citroën has continued efforts to achieve technical savings by purchasing parts combining the best cost and service performance. The Group also intends to


Deploy the supplier guidelines concerning PSA Peugeot Citroën’s social and environmental responsibility requirements–Involve the top 500 suppliers in the process by 2010.

70-75% That’s how much standard parts and components

represent in a vehicle’s average

production cost.

/ 71

environmental standards that are aligned with the Group’s and be committed to continuous improve-ment in this area. In 2006, PSA Peugeot Citroën published supplier guidelines for its social and envi-ronmental responsibility requirements. All suppliers receive a copy and are asked to commit to the standards. Targeted audits are conducted for sup-pliers deemed to be “at risk”. The Group then helps them define and deploy appropriate action plans.Making sustainable development part of pur-chasing also means raising awareness among purchasing officers and internal auditors about sustainability issues in the supply chain. Special training sessions are offered for these team mem-bers, with assistance from the Sustainable Devel-opment Department. The Group Vice-President, Purchasing, also regularly addresses the issue of sustainable development in conferences with the entire Purchasing Department.

enhancing purchasing officers’ competencies –In 2008, PSA Peugeot Citroën launched an inter-nal training programme called Purchasing Busi-ness School to keep its purchasing teams’ skills sets aligned with their profession’s fast-changing environment. During the two-month session, pur-chasing officers receive training in English and French on quality issues, cost analysis and sup-plier risk management. By bringing together team members from different regions (France, Slova-kia, Turkey, Latin America), the Purchasing Busi-ness School offers a perfect opportunity for

experience and knowledge sharing. During the courses, participants are often asked to resolve real-life situations, and at the end of the session, they present a purchasing file to a jury of profes-sionals. In 2008, 90 purchasing officers who attended three separate sessions received diplo-mas from the Purchasing Business School. One of the sessions was devoted specifically to the Group’s purchasing unit in Brazil.

e27 billionWorldwide purchases in 2008. Standard parts used in vehicle

manufacturing accounted for €21 billion

of the total.

StandaRd paRtS bY Region oF pRoduction (in 2008) –

> French plants > Other European Union plants (outside France)

Rest of Europe 33%

Rest of Europe 70%

France 61% France 24%

Rest of the world 6%Rest of the world

6%

SARP INDUSTRIES HAS HELPED PSA PEUGEOT CITROËN WITH INDUSTRIAL WASTE MANAGEMENT SINCE 1980.Thanks to hands-on R&D, the focus of our partnership has shifted from eliminating waste to systematically looking for ways to recover hazardous waste. For several years now, we have provided the Group’s plants with regenerated solvent that is just as effective as new solvent. More recent research has addressed ways to re-use metal particles and cutting oils in sludge from the Group’s mechanical sub-assembly plants.”

PASCAL GAUTHIER / Chairman and CEO of SARP Industries and winner of the Jury’s special prize for sustainable development at the fifth annual Supplier Trophies ceremony

{{


CUStOmeR RelatiOnSin 2008Quality: Warranty costs were down 42% at end-2008 compared with first-half 2006.

The Group’s Responsible Communications Charter was distributed to Communication, Marketing, Legal Affairs, Purchasing and other concerned staff in French, English, Spanish and Chinese.

respond to growing awareness of the automo-bile’s environmental impact. Its research on vehicle architecture and materials focuses on reducing the automobile’s on-the-road impact as much as possible.

To help customers make an informed buying decision, the Peugeot and Citroën have also put fuel-efficiency labels on showroom vehicles and created their own eco-labels (Blue Lion and Airdream).

ethics and customer respect –The customer relationship is based on trust. As a critical component of both brands’ sales policy, the sales contract recognises the importance of the contractual warranty, along with customers’ high expectations in this area and the level of attention required in the dealer networks. To this end, sales teams receive specific guidelines and training. A dedicated unit has been set up within Banque PSA Finance to carefully monitor compliance with lending rules. The unit also intervenes to prevent and manage risks from overextended Peugeot or Citroën customers, in compliance with current legislation.

As the second-largest expense in the average European household, buying an automobile is a major consumer decision. To live up to cus-tomer expectations, PSA Peugeot Citroën con-stantly enhances vehicle features and quality, as well as related services. The Group is also committed to advertising its products in a responsible manner.

Health, safety and environmental issues –PSA Peugeot Citroën’s first responsibility towards customers is to provide vehicles that preserve the health and safety of the driver, passengers and other people on the road, in compliance with current regulations. The Group is also con-stantly working on technological solutions that


Implement the PSA Peugeot Citroën Responsible Communications Charter–

/ 73

customer satisfaction and quality –To guarantee superior service, the brands imple-ment continuous quality improvement plans at three key stages in the customer relationship: purchase, delivery and repair (plus post-repair quality control). Feedback from customers and the dealer networks is carefully tracked. The Peugeot and Citroën brands’ ISO 9001 certifica-tion for quality management systems was renewed in 2006. Outside France, the brands apply for certification from the most representa-tive organisation in the local market.

Responsible advertising –An internal validation process has been set up to review the ethical quality of the Group’s advertis-ing. In 2007, the Group prepared a Responsible Communications Charter to ensure that corporate social responsibility concerns – such as respect for people, the environment and awareness of the economic issues involved in buying a car – are taken into account in its advertising. The Charter, which was deployed in 2008 among the appropri-ate Group and brand teams and their suppliers,

covers all mass media communications, including TV commercials, the Internet, print ads, events and point-of-purchase advertising.

anticipating expectations –PSA Peugeot Citroën conducts tests with groups of consumers to see how its future vehicles and services are perceived. In addition to feedback from customers, the Group meets with consumer organisations to get a better view of the types of questions car owners are asking, as well as how people’s relationship with the automobile and indi-vidual mobility is changing. Lastly, the Group shares its experience with local players in many markets, notably in Latin America and China.

UNWAVERING FOCUS ON QUALITY– Led by the Quality Department, the entire Group has pulled together to put PSA Peugeot Citroën among the top five in JD Power’s 2010 Customer Satisfaction Index (CDI) study. The Department is set up to get a comprehensive view of customer satisfaction in the four areas measured by JD Power: quality and reliability, dealer service satisfaction, vehicle appeal and ownership costs.

{{WE NEED TO INFORM CONSUMERS ABOUT OUR VEHICLES’ PERFORMANCE, NOTABLY IN TERMS OF ENVIRONMENTAL IMPACT, WITHOUT PROMISING MORE THAN WE CAN DELIVER.That’s why we developed a Responsible Communications Charter in-house to help teams in all host countries make the right decisions for all types of media. Everyone involved in communications and their partners should apply the Charter’s guidelines systematically.”

ViRginie de ChaSSey / pSa peUGeOt CitROën’S SUStainable DevelOpment RepReSentative

SteadY decline in waRRantY coStS (Basis 100) –

H1 2006 H1 2007 H1 2008H2 2006 H2 2007 H2 2008

100

8678

7266

58

(42%)



INVOLVING YOUNG PEOPLE IN ENVIRONMENTAL PROTECTION – PSA Peugeot Citroën in Argentina carried out several projects with local NGO Cascos Verdes in 2008. Through the Crear Conciencia programme, the organisation helps give mentally disabled young people a chance to attend university and play a role in society with a two-year training course on environmental protection. Participants visit local classrooms to raise awareness about the environment. In 2008, second-year students had the opportunity to tour and study the Buenos Aires plant’s water treatment plant.

lOCal DevelOpment anD COmmUnity OUtReaChin 2008The first phase of the “Main à la Pâte” hands-on educational programme in Slovakia was completed. The Group has supported the programme since 2004.

In Brazil, the Group won a Sustainable Attitude prize for designing and distributing a brochure on child passenger safety.

children about road safety hazards. The Group has also organised road safety days in primary schools in China and Latin America. These initia-tives are being led in partnership with educational institutions and organisations like the Global Road Safety Partnership in Brazil, the MACIF insurance company, local fire brigades and France’s road safety association.

Concerning the environment, the Group’s sites support local projects to preserve, restore or reclaim surrounding natural areas, such as the banks of the Seine river near the Poissy plant in the Paris area. Awareness campaigns targeted to employees and the general public are also carried out, notably to encourage eco-driving practices.

PSA Peugeot Citroën is actively involved in the societal discussion on mobility. Mobility is a basic right that provides access to jobs, healthcare and other fundamental rights. In 2000, PSA Peugeot Citroën created the City on the Move Institute (IVM), which has initiated and promoted research and trials aimed at understanding how urban mobility is changing. Its projects bring together business people, researchers, academics, archi-tects, urban planners, urban developers, local authorities and other key players. One of these projects on the day-to-day mobility of employees led to the publication by Editions Les Carnets de l’Info of a book entitled Domicile-travail, les sala-riés à bout de souffle! by Éric Le Breton, the proj-ect’s scientific director. IVM also organised a

When it comes to meeting its responsibilities towards the community, PSA Peugeot Citroën focuses first and foremost on designing and pro-ducing safe, environmentally friendly cars using good labour practices. The Group takes its responsibility a step further by getting involved in sponsorship and community outreach pro-grams on a daily basis. This policy is expressed at both the corporate and local levels.

promoting safety, environmental protection and mobility –PSA Peugeot Citroën’s sponsorship approach illus-trates its commitment to the community. In line with the Group’s sustainable development challenges, the first three areas of involvement cover road safety, environmental protection and sustainable mobility.

In addition to installing safety equipment in its vehicles, the Group carries out campaigns to raise driver awareness, as drivers are the key to road safety. In all host countries, the Group’s sites regularly organise road safety exhibits and pro-grammes, including remedial and safe driving courses, free vehicle inspections, driving simula-tors and brochure campaigns. In the Paris suburb of Aulnay, for example, PSA Peugeot Citroën helped create a go-kart driving school to teach


Finance innovative mobility solutions–

/ 75

HANDS-ON METHOD – From 2004 to 2008, PSA Peugeot Citroën supported a Franco-Slovak experiment to promote a hands-on method of teaching science in the primary schools of Trnava called “La Main à la Pâte”. Introduced in France in the 1990s by Nobel physics prize winner Georges Charpak, this method emphasises hands-on experiments, exploration and working in groups. Phase One of the project, which brought together PSA Peugeot Citroën and the French and Slovak education systems, was completed at end-2008. In 2009, the partnership will continue in Trnava and expand to other regions of Slovakia.

mobility workshop as part of France’s Social Inclu-sion Summit in 2008. In China and Latin America, IVM continued to support innovative thinking on the quality of urban life, in line with local priorities.

combating exclusion and fostering inclusion –PSA Peugeot Citroën’s sponsorship policy also covers the fight against exclusion. Projects are organised by the various sites to support or supplement work being done by local organisa-tions. At the corporate level, the Group has sup-ported the Paris emergency social services agency for more than ten years and is a member of the agency’s Board of Directors. The Group donates and maintains the organisation’s entire fleet of vehicles, which drive around Paris on the lookout for homeless people in need of emergency assistance.

giving back to the local community –In addition to its corporate commitments, PSA Peugeot Citroën carries out programs at all its sites targeted to neighbours and surrounding communities as part of local sponsorship and social responsibility action plans. These programs

can either be organised by the site itself or support existing initiatives, such as the Fondation de la Deuxième Chance in Rennes. For several years, the Vélizy facility has participated in “Run For the Heart,” a humanitarian run to raise public aware-ness of the importance of organ donations. Lastly, several sites organise annual Solidarity Trophies competitions during which employees can present projects to support a particular cause (humanitar-ian, environmental, etc.). The winning projects receive an award, along with financial support.

long live tHe Seine, an association created in 2004 and supported by the PSA Peugeot Citroën plant in Poissy, teaches children in recreational centres about the importance of preserving the environment.

Close-upPeugeot 308 instrument panel

OUR performanCe

76 /

/ 77

psa peuGeoT CITroËn / 2008 SUStainable DevelOPment anD annUal RePORt

PeUgeOt PaRtneR tePee

supported by its dedicated teams, PSa Peugeot Citroën is deploying the resources needed to withstand the impact of the recession. in 2008, we maintained our share of both the european and global markets, while continuing to demonstrate a clear commitment to our social and environmental responsibilities.

CO2 emissionsEurope’s lowest corporate average

CO2 emissions, at 140 grams per km in 2008, according to the ranking

prepared by ADEME*.*France’s Agency for the Environment and Energy Management.

Sales performance Europe’s second largest automaker, with 13.8%

of the market.

Quality40% decline

in number of end-of-line factory defects.

The following chapter presents a selection of the Group’s performance indicators, which are described in full detail on the CD-Rom, attached on page 93.


78 / our performanCe > finanCial inDiCatORS

31 December 2008 31 December 2007 31 December 2006

(in million euros)

Manufacturing and Sales

companiesFinance

companies Eliminations Total


companiesFinance



companiesFinance


aSSetSGoodwill 1,237 75 – 1,312 1,488 75 – 1,563 1,488 75 – 1,563Intangible assets 4,061 96 – 4,157 3,885 94 – 3,979 3,947 87 – 4,034Property, plant and equipment 14,064 41 – 14,105 14,652 44 – 14,696 15,221 47 – 15,268Investments in companies at equity 732 14 – 746 725 12 – 737 687 12 – 699Investments in non-consolidated companies 48 13 – 61 47 3 – 50 53 – – 53Other non-current financial assets 848 46 (25) 869 1,121 47 – 1,168 1,321 47 – 1,368Other non-current assets 152 1 – 153 126 1 – 127 96 1 – 97Deferred tax assets 468 75 – 543 428 37 – 465 499 36 – 535Total non-current assets 21,610 361 (25) 21,946 22,472 313 – 22,785 23,312 305 – 23,617

Operating assetsLoans and receivables - finance companies – 22,495 (136) 22,359 – 23,393 (170) 23,223 – 22,802 (99) 22,703Short-term investments - finance companies – 1,182 – 1,182 – 3,310 – 3,310 – 2,818 – 2,818Inventories 7,757 – – 7,757 6,913 – – 6,913 6,826 – – 6,826Trade receivables - manufacturing and sales companies 2,001 – (146) 1,855 2,857 – (157) 2,700 3,043 – (193) 2,850Current taxes 189 35 (17) 207 169 37 (44) 162 210 29 (26) 213Other receivables 1,897 1,028 (256) 2,669 1,782 772 (134) 2,420 1,719 617 (68) 2,268

11,844 24,740 (555) 36,029 11,721 27,512 (505) 38,728 11,798 26,266 (386) 37,678Current financial assets 515 – – 515 1,483 – – 1,483 1,132 – – 1,132Cash and cash equivalents 2,040 1,280 (90) 3,230 5,185 943 (149) 5,979 6,339 620 (292) 6,667

Total current assets 14,399 26,020 (645) 39,774 18,389 28,455 (654) 46,190 19,269 26,886 (678) 45,477

Total assets 36,009 26,381 (670) 61,720 40,861 28,768 (654) 68,975 42,581 27,191 (678) 69,094

eQUitY anD liabilitieSEquity Share capital 234 234 235Treasury stock (303) (271) (261)Retained earnings and other accumulated equity, excluding minority interests 13,212 14,282 13,744Minority interests 134 310 388Total equity 13,277 14,555 14,106

Non-current financial liabilities 4,491 – – 4,491 4,294 – – 4,294 4,125 – – 4,125Other non-current liabilities 2,793 – – 2,793 2,886 1 – 2,887 2,759 – – 2,759Non-current provisions 876 24 – 900 1,109 23 – 1,132 1,383 23 – 1,406Deferred tax liabilities 1,321 450 – 1,771 1,689 364 – 2,053 1,854 329 – 2,183Total non-current liabilities 9,481 474 – 9,955 9,978 388 – 10,366 10,121 352 – 10,473

Operating liabilitiesFinancing liabilities – 21,864 (118) 21,746 – 24,670 (148) 24,522 – 23,259 (215) 23,044Current provisions 2,053 27 – 2,080 2,132 29 – 2,161 1,747 38 – 1,785Trade payables 8,428 – (11) 8,417 10,600 – (29) 10,571 10,481 – (25) 10,456Current taxes 76 27 (17) 86 158 55 (44) 169 152 43 (26) 169Other payables 3,795 1,070 (399) 4,466 4,241 732 (292) 4,681 4,075 847 (261) 4,661

14,352 22,988 (545) 36,795 17,131 25,486 (513) 42,104 16,455 24,187 (527) 40,115Current financial liabilities 1,818 – (125) 1,693 2,091 – (141) 1,950 4,551 – (151) 4,400

Total current liabilities 16,170 22,988 (670) 38,488 19,222 25,486 (654) 44,054 21,006 24,187 (678) 44,515

Total equity and liabilities 61,720 68,975 69,094

COnSOliDateD balanCe SheetS

/ 79

31 December 2008 31 December 2007 31 December 2006

(in million euros)


companiesFinance



companiesFinance



companiesFinance


aSSetSGoodwill 1,237 75 – 1,312 1,488 75 – 1,563 1,488 75 – 1,563Intangible assets 4,061 96 – 4,157 3,885 94 – 3,979 3,947 87 – 4,034Property, plant and equipment 14,064 41 – 14,105 14,652 44 – 14,696 15,221 47 – 15,268Investments in companies at equity 732 14 – 746 725 12 – 737 687 12 – 699Investments in non-consolidated companies 48 13 – 61 47 3 – 50 53 – – 53Other non-current financial assets 848 46 (25) 869 1,121 47 – 1,168 1,321 47 – 1,368Other non-current assets 152 1 – 153 126 1 – 127 96 1 – 97Deferred tax assets 468 75 – 543 428 37 – 465 499 36 – 535Total non-current assets 21,610 361 (25) 21,946 22,472 313 – 22,785 23,312 305 – 23,617

Operating assetsLoans and receivables - finance companies – 22,495 (136) 22,359 – 23,393 (170) 23,223 – 22,802 (99) 22,703Short-term investments - finance companies – 1,182 – 1,182 – 3,310 – 3,310 – 2,818 – 2,818Inventories 7,757 – – 7,757 6,913 – – 6,913 6,826 – – 6,826Trade receivables - manufacturing and sales companies 2,001 – (146) 1,855 2,857 – (157) 2,700 3,043 – (193) 2,850Current taxes 189 35 (17) 207 169 37 (44) 162 210 29 (26) 213Other receivables 1,897 1,028 (256) 2,669 1,782 772 (134) 2,420 1,719 617 (68) 2,268

11,844 24,740 (555) 36,029 11,721 27,512 (505) 38,728 11,798 26,266 (386) 37,678Current financial assets 515 – – 515 1,483 – – 1,483 1,132 – – 1,132Cash and cash equivalents 2,040 1,280 (90) 3,230 5,185 943 (149) 5,979 6,339 620 (292) 6,667

Total current assets 14,399 26,020 (645) 39,774 18,389 28,455 (654) 46,190 19,269 26,886 (678) 45,477

Total assets 36,009 26,381 (670) 61,720 40,861 28,768 (654) 68,975 42,581 27,191 (678) 69,094

eQUitY anD liabilitieSEquity Share capital 234 234 235Treasury stock (303) (271) (261)Retained earnings and other accumulated equity, excluding minority interests 13,212 14,282 13,744Minority interests 134 310 388Total equity 13,277 14,555 14,106

Non-current financial liabilities 4,491 – – 4,491 4,294 – – 4,294 4,125 – – 4,125Other non-current liabilities 2,793 – – 2,793 2,886 1 – 2,887 2,759 – – 2,759Non-current provisions 876 24 – 900 1,109 23 – 1,132 1,383 23 – 1,406Deferred tax liabilities 1,321 450 – 1,771 1,689 364 – 2,053 1,854 329 – 2,183Total non-current liabilities 9,481 474 – 9,955 9,978 388 – 10,366 10,121 352 – 10,473

Operating liabilitiesFinancing liabilities – 21,864 (118) 21,746 – 24,670 (148) 24,522 – 23,259 (215) 23,044Current provisions 2,053 27 – 2,080 2,132 29 – 2,161 1,747 38 – 1,785Trade payables 8,428 – (11) 8,417 10,600 – (29) 10,571 10,481 – (25) 10,456Current taxes 76 27 (17) 86 158 55 (44) 169 152 43 (26) 169Other payables 3,795 1,070 (399) 4,466 4,241 732 (292) 4,681 4,075 847 (261) 4,661

14,352 22,988 (545) 36,795 17,131 25,486 (513) 42,104 16,455 24,187 (527) 40,115Current financial liabilities 1,818 – (125) 1,693 2,091 – (141) 1,950 4,551 – (151) 4,400

Total current liabilities 16,170 22,988 (670) 38,488 19,222 25,486 (654) 44,054 21,006 24,187 (678) 44,515

Total equity and liabilities 61,720 68,975 69,094



COnSOliDateD StatementS Of inCOme

2008 2007 2006

(in million euros)


companiesFinance



companiesFinance



companiesFinance


Revenues 52,705 2,088 (437) 54,356 57,132 1,999 (455) 58,676 53,789 1,761 (365) 55,185Cost of goods and services sold (44,146) (1,211) 437 (44,920) (46,909) (1,064) 455 (47,518) (44,002) (833) 365 (44,470)Selling, general and administrative expenses (6,521) (320) – (6,841) (7,007) (327) – (7,334) (7,255) (324) – (7,579)Research and development expenses (2,045) – – (2,045) (2,072) – – (2,072) (2,017) – – (2,017)Recurring operating income (7) 557 – 550 1,144 608 – 1,752 515 604 – 1,119

Non-recurring operating income and (expenses) (916) (1) – (917) (632) – – (632) (808) – – (808)

Operating income (923) 556 – (367) 512 608 – 1,120 (293) 604 – 311

Interest income 247 – – 247 283 – – 283 178 – – 178Finance costs (343) – – (343) (306) – – (306) (234) – – (234)Other financial income and (expenses), net (189) (1) – (190) (16) (1) – (17) (48) (1) – (49)Income before tax of fully consolidated companies (1,208) 555 – (653) 473 607 – 1,080 (397) 603 – 206

Current taxes (156) (137) – (293) (218) (149) – (367) (101) (178) – (279)Deferred taxes 449 (60) – 389 102 (37) – 65 150 (27) – 123Income taxes 293 (197) – 96 (116) (186) – (302) 49 (205) – (156)

Share in net earnings of companies at equity 57 – – 57 48 – – 48 20 – – 20

Consolidated profit (loss) for the year (858) 358 – (500) 405 421 – 826 (328) 398 – 70

Attributable to equity holders of the parent (699) 356 – (343) 467 418 – 885 (211) 394 – 183Attributable to minority interests (159) 2 – (157) (62) 3 – (59) (117) 4 – (113)

(in euros)

Basic earnings per e1 par value share (1.51) 3.88 0.80Diluted earnings per e1 par value share (1.51) 3.86 0.80

In order to better reflect the economic reality of the Group’s business transactions, the accounting presentation of certain previously report-ed figures has been changed, which has had the effect of reducing

reported Automobile Division revenues and consequently consolidated revenues. For a more detailed explanation, please refer to note 2 to the consolidated financial statements in the 2008 Registration Document.

/ 81

2008 2007 2006

(in million euros)


companiesFinance



companiesFinance



companiesFinance


Revenues 52,705 2,088 (437) 54,356 57,132 1,999 (455) 58,676 53,789 1,761 (365) 55,185Cost of goods and services sold (44,146) (1,211) 437 (44,920) (46,909) (1,064) 455 (47,518) (44,002) (833) 365 (44,470)Selling, general and administrative expenses (6,521) (320) – (6,841) (7,007) (327) – (7,334) (7,255) (324) – (7,579)Research and development expenses (2,045) – – (2,045) (2,072) – – (2,072) (2,017) – – (2,017)Recurring operating income (7) 557 – 550 1,144 608 – 1,752 515 604 – 1,119

Non-recurring operating income and (expenses) (916) (1) – (917) (632) – – (632) (808) – – (808)

Operating income (923) 556 – (367) 512 608 – 1,120 (293) 604 – 311

Interest income 247 – – 247 283 – – 283 178 – – 178Finance costs (343) – – (343) (306) – – (306) (234) – – (234)Other financial income and (expenses), net (189) (1) – (190) (16) (1) – (17) (48) (1) – (49)Income before tax of fully consolidated companies (1,208) 555 – (653) 473 607 – 1,080 (397) 603 – 206

Current taxes (156) (137) – (293) (218) (149) – (367) (101) (178) – (279)Deferred taxes 449 (60) – 389 102 (37) – 65 150 (27) – 123Income taxes 293 (197) – 96 (116) (186) – (302) 49 (205) – (156)

Share in net earnings of companies at equity 57 – – 57 48 – – 48 20 – – 20

Consolidated profit (loss) for the year (858) 358 – (500) 405 421 – 826 (328) 398 – 70

Attributable to equity holders of the parent (699) 356 – (343) 467 418 – 885 (211) 394 – 183Attributable to minority interests (159) 2 – (157) (62) 3 – (59) (117) 4 – (113)

(in euros)

Basic earnings per e1 par value share (1.51) 3.88 0.80Diluted earnings per e1 par value share (1.51) 3.86 0.80



COnSOliDateD StatementS Of CaSh flOwS

2008 2007 2006

(in million euros)


companiesFinance



companiesFinance



companiesFinance


Consolidated profit (loss) for the year (858) 358 – (500) 405 421 – 826 (328) 398 – 70Adjustments for:- Depreciation, amortisation and impairment 3,664 15 – 3,679 3,559 14 – 3,573 3,686 12 – 3,698- Non-current provisions (136) 1 – (135) (227) 1 – (226) (148) (1) – (149)- Changes in deferred tax (447) 63 – (384) (114) 38 – (76) (139) 29 – (110)- (Gains) losses on disposals and other 124 – – 124 (94) – – (94) (54) 2 – (52)

Share in net (earnings) losses of companies at equity, net of dividends received (37) – – (37) (46) – – (46) (17) – – (17)

Revaluation adjustments taken to equity and hedges of debt 70 – – 70 32 1 – 33 11 4 – 15Working capital 2,380 437 – 2,817 3,515 475 – 3,990 3,011 444 – 3,455Changes in operating assets and liabilities (2,924) 153 16 (2,755) 920 37 134 1,091 424 (234) (37) 153Net cash from (used in) operating activities (544) 590 16 62 4,435 512 134 5,081 3,435 210 (37) 3,608

Proceeds from disposals of shares in consolidated companies – – – – – – – – 2 – – 2Proceeds from disposals of investments in non-consolidated companies – – – – 11 – – 11 – – – –Acquisitions of shares in consolidated companies (2) – – (2) – – – – (1) – – (1)Investments in non-consolidated companies (25) (12) – (37) (7) (3) – (10) (19) (13) – (32)Proceeds from disposals of property, plant and equipment 69 10 – 79 148 9 – 157 155 6 – 161Proceeds from disposals of intangible assets 9 – – 9 8 – – 8 3 – – 3Investments in property, plant and equipment (2,080) (14) – (2,094) (1,924) (13) – (1,937) (2,520) (11) – (2,531)Investments in intangible assets (1,069) (11) – (1,080) (789) (14) – (803) (937) (16) – (953)Change in amounts payable on fixed assets (1) – – (1) (132) – – (132) (101) – – (101)Other (122) 5 – (117) (148) 1 – (147) (54) – – (54)Net cash from (used in) investing activities (3,221) (22) – (3,243) (2,833) (20) – (2,853) (3,472) (34) – (3,506)

Dividends paid:- To Peugeot S.A. shareholders (342) – – (342) (309) – – (309) (309) – – (309)- Intragroup 168 (168) – – 157 (157) – – 161 (161) – –- To minority shareholders of subsidiaries (17) (2) – (19) (11) – – (11) (6) (32) – (38)(Purchases) sales of treasury stock (43) – – (43) (23) – – (23) (39) – – (39)Changes in other financial assets and liabilities 929 – 42 971 (559) – 8 (551) 205 – (23) 182Other – 3 – 3 – – – – – – – –Net cash from (used in) financing activities 695 (167) 42 570 (745) (157) 8 (894) 12 (193) (23) (204)

Effect of changes in exchange rates (56) (64) 1 (119) (22) (12) 1 (33) 45 2 (2) 45

Net increase (decrease) in cash and cash equivalents (3,126) 337 59 (2,730) 835 323 143 1,301 20 (15) (62) (57)

Net cash and cash equivalents at beginning of year 5,143 943 (149) 5,937 4,308 620 (292) 4,636 4,288 635 (230) 4,693

Net cash and cash equivalents at end of year 2,017 1,280 (90) 3,207 5,143 943 (149) 5,937 4,308 620 (292) 4,636

/ 83

2008 2007 2006

(in million euros)


companiesFinance



companiesFinance



companiesFinance


Consolidated profit (loss) for the year (858) 358 – (500) 405 421 – 826 (328) 398 – 70Adjustments for:- Depreciation, amortisation and impairment 3,664 15 – 3,679 3,559 14 – 3,573 3,686 12 – 3,698- Non-current provisions (136) 1 – (135) (227) 1 – (226) (148) (1) – (149)- Changes in deferred tax (447) 63 – (384) (114) 38 – (76) (139) 29 – (110)- (Gains) losses on disposals and other 124 – – 124 (94) – – (94) (54) 2 – (52)

Share in net (earnings) losses of companies at equity, net of dividends received (37) – – (37) (46) – – (46) (17) – – (17)

Revaluation adjustments taken to equity and hedges of debt 70 – – 70 32 1 – 33 11 4 – 15Working capital 2,380 437 – 2,817 3,515 475 – 3,990 3,011 444 – 3,455Changes in operating assets and liabilities (2,924) 153 16 (2,755) 920 37 134 1,091 424 (234) (37) 153Net cash from (used in) operating activities (544) 590 16 62 4,435 512 134 5,081 3,435 210 (37) 3,608

Proceeds from disposals of shares in consolidated companies – – – – – – – – 2 – – 2Proceeds from disposals of investments in non-consolidated companies – – – – 11 – – 11 – – – –Acquisitions of shares in consolidated companies (2) – – (2) – – – – (1) – – (1)Investments in non-consolidated companies (25) (12) – (37) (7) (3) – (10) (19) (13) – (32)Proceeds from disposals of property, plant and equipment 69 10 – 79 148 9 – 157 155 6 – 161Proceeds from disposals of intangible assets 9 – – 9 8 – – 8 3 – – 3Investments in property, plant and equipment (2,080) (14) – (2,094) (1,924) (13) – (1,937) (2,520) (11) – (2,531)Investments in intangible assets (1,069) (11) – (1,080) (789) (14) – (803) (937) (16) – (953)Change in amounts payable on fixed assets (1) – – (1) (132) – – (132) (101) – – (101)Other (122) 5 – (117) (148) 1 – (147) (54) – – (54)Net cash from (used in) investing activities (3,221) (22) – (3,243) (2,833) (20) – (2,853) (3,472) (34) – (3,506)

Dividends paid:- To Peugeot S.A. shareholders (342) – – (342) (309) – – (309) (309) – – (309)- Intragroup 168 (168) – – 157 (157) – – 161 (161) – –- To minority shareholders of subsidiaries (17) (2) – (19) (11) – – (11) (6) (32) – (38)(Purchases) sales of treasury stock (43) – – (43) (23) – – (23) (39) – – (39)Changes in other financial assets and liabilities 929 – 42 971 (559) – 8 (551) 205 – (23) 182Other – 3 – 3 – – – – – – – –Net cash from (used in) financing activities 695 (167) 42 570 (745) (157) 8 (894) 12 (193) (23) (204)

Effect of changes in exchange rates (56) (64) 1 (119) (22) (12) 1 (33) 45 2 (2) 45

Net increase (decrease) in cash and cash equivalents (3,126) 337 59 (2,730) 835 323 143 1,301 20 (15) (62) (57)

Net cash and cash equivalents at beginning of year 5,143 943 (149) 5,937 4,308 620 (292) 4,636 4,288 635 (230) 4,693

Net cash and cash equivalents at end of year 2,017 1,280 (90) 3,207 5,143 943 (149) 5,937 4,308 620 (292) 4,636


84 / our performanCe > PRODUCt inDiCatORS

2008 2007 2006

Western Europe 2,079,100 2,323,600 2,296,200

Peugeot 1,084,200 1,223,700 1,224,900Citroën 994,900 1,099,900 1,071,300

Central and Eastern Europe 204,100 217,500 193,000

Peugeot 115,500 126,200 112,900Citroën 88,600 91,300 80,100

Russia 59,200 37,200 29,400

Peugeot 48,300 26,300 16,100Citroën 10,900 10,900 13,300

Latin America 263,300 266,000 215,100

Peugeot 166,400 181,200 155,400Citroën 96,900 84,800 59,700

China 179,100 208,900 202,500

Peugeot 77,100 93,200 81,900Citroën 102,000 115,700 120,600

Rest of the world 166,800 180,600 179,300

Peugeot 121,400 135,200 132,400Citroën 45,400 45,400 46,900

TOTAL ASSEMbLED vEhICLES 2,951,600 3,233,800 3,115,500

Peugeot 1,612,800 1,785,800 1,723,600Citroën 1,338,800 1,448,000 1,391,900

TOTAL CKD uNITS 308,800 194,600 250,400

Peugeot 291,400 181,200 236,200Citroën 17,400 13,400 14,200

TOTAL ASSEMbLED vEhICLES AND CKD uNITS 3,260,400 3,428,400 3,365,900

Peugeot 1,904,100 1,967,100 1,959,800Citroën 1,356,300 1,461,300 1,406,100

Consolidated worldwide sales by region

PRODUCt inDiCatORS

/ 85

(passenger cars and light commercial vehicles) 2008 2007 2006

PEuGEOT BRAND107 106,500 104,400 98,6001007 11,000 18,600 34,100206 292,300 308,200 475,100207 468,300 520,200 300,500307 142,300 369,100 447,000308 290,100 82,500 –405 211,100 131,300 158,200406 1,700 3,000 3,300407 81,400 136,000 181,500607 3,900 7,500 10,500807 13,500 21,100 24,2004007 13,700 6,300 –Expert 39,900 43,600 33,100Partner 147,600 160,700 148,500Boxer 55,300 54,200 44,600Bipper 25,100 400 –Others 400 – 600TOTAL 1,904,100 1,967,100 1,959,800

of which diesel-powered versions 877,900 951,600 914,400of which passenger cars 1,671,500 1,748,000 1,759,400of which light commercial vehicles 232,600 219,100 200,400

CITROëN BRANDC1 106,700 99,500 90,300C2 67,100 94,900 103,900C3 242,100 276,700 286,700ZX 68,500 59,500 92,900Xsara family 76,000 119,200 183,500C4 family 383,400 437,900 262,400Xantia 14,100 10,400 11,300C5 87,900 50,900 73,200C6 2,800 7,600 7,100C8 8,800 12,700 20,300C-Crosser 12,300 6,600 –Jumpy 39,500 38,700 33,800C15 – – 1,300Berlingo 162,400 187,700 194,600Jumper 54,000 58,600 44,800Nemo 30,600 400 –TOTAL 1,356,300 1,461,300 1,406,100

of which diesel-powered versions 788,900 835,600 759,200of which passenger cars 1,132,400 1,245,200 1,210,900of which light commercial vehicles 223,900 216,100 195,200

TOTAL PSA Peugeot Citroën 3,260,400 3,428,400 3,365,900

of which diesel-powered versions 1,666,800 1,787,200 1,673,600of which passenger cars 2,803,900 2,993,200 2,970,300of which light commercial vehicles 456,500 435,200 395,600

worldwide sales by model

PRODUCt inDiCatORS Sales

86 /


86 / our performanCe > PRODUCt inDiCatORS

Fuel Displacement horsepower Consumption (l /100km) CO2 Noise

CC kW City highway Combined gram per km db(a)

Peugeot 1071.0 bvM P 998 50 5.5 3.9 4.5 106 70.01.4 hDi D 1,398 40 5.3 3.4 4.1 109 71.2

Peugeot 10071.4 bvM P 1,360 54 8.6 5.2 6.5 153 73.21.4 hDi D 1,398 50 5.6 3.9 4.5 120 73.7

Peugeot 206 hatchback1.4 P 1,360 55 8.8 5.0 6.4 152 73.31.4 hDi D 1,398 50 5.4 3.7 4.3 112 70.9

Peugeot 207 hatchback1.4 P 1,360 55 8.4 5.0 6.3 150 73.61.4 VTi P 1,397 70 7.9 4.8 5.9 140 72.71.6 hDi D 1,560 66 5.7 3.7 4.4 117 73.6

Peugeot 308 hatchback1.4 VTi P 1,397 70 9.0 5.2 6.5 155 73.71.6 vTi P 1,598 88 9.3 5.2 6.7 159 73.91.6 HDi D 1,560 66 5.8 3.8 4.5 120 73.21.6 hDi FAP D 1,560 80 5.9 3.8 4.5 120 73.8

Peugeot 407 saloon2.0 P 1,997 103 11.0 6.4 8.6 192 73.41.6 HDi FAP D 1,560 80 6.8 4.4 5.3 140 73.52.0 hDi FAP D 1,997 100 7.5 4.7 5.7 150 74.3

Peugeot 407 Coupé2.2 bvM P 2,230 120 13.1 6.9 9.2 219 74.02.0 HDi FAP D 1,997 100 7.8 4.8 5.9 156 73.72.7 hDi bvA D 2,720 150 11.9 6.5 8.5 225 71.6

Peugeot 40072.2 hDi FAP D 2,179 115 9.5 5.9 7.2 191 74.9

Peugeot 6073.0 P 2,946 155 14.9 7.5 10.2 242 73.22.0 HDi BVM FAP D 1,997 100 8.1 5.0 6.1 160 74.62.7 hDi bvA FAP D 2,720 150 11.6 6.6 8.4 223 72.0

Peugeot 8072.0 bvM P 1,997 103 12.0 7.3 9.0 213 72.42.0 HDi D 1,997 88 8.8 5.8 6.9 182 74.62.0 hDi FAP D 1,997 100 9.0 6.0 7.1 188 73.3

Partner Tepee1.6 P 1,587 66 10.8 6.8 8.2 195 73.31.6 hDi D 1,560 66 7.0 5.0 5.7 150 74.2

Expert Tepee 2.0 P 1,997 103 13.3 8.2 10.1 241 73.31.6 hDi D 1,560 66 8.4 6.6 7.2 191 74.4

bold: the best-selling vehicle in its category in France (petrol and diesel version).Light: vehicle emitting the least CO2 in its category (petrol and diesel version).

PeUgeOt (2008)

Peugeot 30081.6 VTi P 1,598 88 9.8 5.6 7.1 165 73.31.6 HDi FAP BMP6 D 1,560 80 5.9 4.3 4.9 130 72.9

bipper Tepee 1.4 P 1,360 54 8.8 5.9 6.9 165 70.01.4 HDi BVM D 1,398 50 5.7 3.8 4.5 119 71.0

Peugeot 407 saloon1.6 HDi FAP D 1,560 80 6.4 4.1 4.9 129 73.5

models/versions launched in the 1st half 2009

PRODUCt inDiCatORS

/ 87

Fuel Displacement horsepower Consumption (l /100km) CO2 Noise

CC kW City highway Combined gram per km db(a)

Citroën C11.0 P 998 50 5.5 3.9 4.5 106 70.0hDi 55 D 1,398 40 5.3 3.4 4.1 109 71.2

Citroën C21.4 SensoDrive Stop & Start P 1,360 65 6.8 4.8 5.6 130 70.51.1 P 1,124 44 7.5 4.8 5.8 138 72.9hDi 70 D 1,398 50 5.3 3.7 4.3 113 73.8HDi 70 SensoDrive D 1,398 50 4.9 3.8 4.2 111 72.7

Citroën C31.4 16v Stop & Start P 1,360 65 6.9 4.9 5.7 135 70.81.4 P 1,360 54 8.2 4.9 6.1 145 73.8hDi 70 D 1,398 50 5.3 3.8 4.4 115 72.9Hdi 70 SensoDrive D 1,398 50 4.9 3.9 4.3 113 71.3

Citroën berlingo1.6 16v P 1,587 66 10.8 6.8 8.2 195 73.3HDi 110 FAP D 1,560 80 6.8 4.9 5.6 147 73.5hDi 92 D 1,560 66 7.0 5.0 5.7 150 74.2

Citroën Xsara Picasso1.6 16v P 1,587 80 9.5 6.0 7.3 172 71.9hDi 92 D 1,560 66 6.4 4.2 5.0 130 73.4

Citroën C4 1.4 16v P 1,360 65 8.7 5.2 6.4 153 71.6vTi 120 P 1,598 88 9.3 5.2 6.7 159 74.0hDi 92 D 1,560 66 5.7 3.7 4.4 117 74.1

Citroën C4 PicassoTHP 150 P 1,598 110 9.9 5.8 7.3 173 73.0vTi 120 P 1,598 88 10.0 5.9 7.4 174 73.8hDi 110 FAP D 1,560 80 6.9 4.7 5.5 145 72.2HDi 110 FAP Airdream BMP6 D 1,560 80 6.4 4.7 5.3 140 70.1

Citroën C51.8 16v P 1,749 92 10.8 6.2 7.9 188 72.12.0 16v P 1,997 103 12.0 6.3 8.4 198 72.8hDi 140 FAP D 1,997 103 7.5 4.8 5.8 153 71.1HDi 110 FAP Airdream D 1,560 80 6.6 4.6 5.3 140 71.7

Citroën C63.0 v6 P 2,946 155 16.3 8.2 11.2 266 72.2v6 hDi 208 FAP D 2,720 150 12.0 6.8 8.7 230 70.2HDi 173 FAP D 2,179 125 8.7 5.4 6.6 175 75.0

Citroën C82.0 16v P 1,997 103 12.0 7.3 9.0 213 72.4hDi 120 D 1,997 88 8.8 5.8 6.9 182 74.6

Citroën C-CrosserhDi 160 FAP D 2,179 115 9.5 5.9 7.2 191 74.9

bold: the best-selling vehicle in its category in France (petrol and diesel version).Light: vehicle emitting the least CO2 in its category (petrol and diesel version).

CitROën (2008)

fuel consumption, CO2 emissions and noise emissions

Citroën C3 PicassoVTi 95 P 1,397 70 9.1 5.5 6.8 157 74.0HDi 90 D 1,560 66 6.0 4.0 4.7 125 74.9

Citroën Nemo Combi1.4 P 1,360 54 8.8 5.9 7.0 165 70.0HDi 70 BVM D 1,398 50 5.7 3.8 4.5 119 71.0

models/versions launched in the 1st half 2009

A more detailed presentation of the product indicators may be found in the “Products” chapter of the 2008 Sustainable Development Performance Indicators supplement.


88 / our performanCe > PRODUCtiOn Plant enviROnmental inDiCatORS

PRODUCtiOn Plant enviROnmental inDiCatORS

units 2008 2007 2006

Direct consumption of primary energy (MWh ncv) TOTAL 2,768,132 2,885,961 2,915,167

of which PCA 2,457,305 2,591,246 2,794,328

Direct consumption of secondary energy (MWh) TOTAL 3,157,242 3,355,813 3,241,687

of which PCA 2,901,511 3,115,472 3,157,849

Direct greenhouse gas emissions (tonnes CO2 eq.) TOTAL 596,999 624,495 636,878

of which PCA 529,425 559,601 610,285

Indirect CO2 emissions (tonnes) PCA 366,434

Direct SO2 emissions (tonnes) TOTAL 43.6 121.9 313.3

of which PCA 26.6 101.7 304.8

Direct NO2 emissions (tonnes) TOTAL 583.9 628.4 666.0

of which PCA 510.5 556.7 636.4

Paintshop VOC releases VOC (tonnes) PCA 9,505 11,136 12,128

Ratio/vehicle PCA 4.13 4.39 4.88

Annual water withdrawal cu.m TOTAL 12,597,953 13,353,961 14,662,685

of which PCA 11,592,727 12,306,742 14,396,598

Gross effluent discharge, ex-works COD (kg / year) PCA 2,351,932 2,459,755 2,926,580

BOD5 (kg / year) PCA 705,537 747,668 1,085,337

SM (kg / year) PCA 661,771 663,813 587,958

Weight of waste (excluding metal waste) (tonnes) TOTAL 397,712 431,481 395,879

of which PCA 358,660 390,954 376,483

List of ISO 14001-certified production facilities Asnières, Aulnay, Buenos Aires, Caen, Charleville, Hérimoncourt, La Garenne, Madrid,

Mangualde, Metz, Mulhouse, Poissy, Porto Real, Rennes, Saint-Ouen, Sept-Fons, Sochaux, Trémery, Trnava, Valenciennes, Vesoul, Vigo.

List of ISO 14001-certified production joint ventures Française de Mécanique, Sevelnord, Wuhan, Xiangfan, Sevelsud, Kolín.

Scope: Total = PCA, AP/AC, PCO, PMTC, Gefco PCA = Manufacturing operations of the Automobile Division

Definitions: SO2 = Sulphur dioxide NO2 = Nitrogen dioxide VOC = Volatile organic compounds COD = Chemical oxygen demand BOD5 = Biochemical oxygen demand after 5 days SM = Suspended mater

/ 89

1995 2006 2007 200800

100,000

200,000

300,000

400,000

500,000

600,000

700,000

100

200

300

400

500

1995 2006 2007 2008 2010Objective

00

1,000,000

Heavy fuel oil + HHONG + LPGCoal + Coke

SteamElectricityRatio (in MWh ncv/vehicle)

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

1

2

3

4

3.08

2.392.25

405

245221 230

2.332.10

Energy consumption(in MWh ncv)

Ratio(MWh ncv/vehicle)

Greenhouse gas emissions(in t CO2 eq.)

Ratio(in kg CO2 eq./vehicle)

City water Surface water

Underground waterRatio (in cu.m/vehicle)

Greenhouse gases Ratio (in kg CO2 eq./vehicle)

1995 2006 2007 200800

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

5

10

1514.16

5.794.85 5.03

Water used(in cu.m)

Ratio(in cu.m/vehicle)

Non-hazardous industrial wasteSludge + effluent + other

Ratio (in kg/vehicle)

1995 2006 2007 200800

40,000

80,000

120,000

160,000

180,000

20,000

60,000

100,000

140,000

200,000

10

20

30

40

50

60

70

80

90

10094

7368 69

Weight of waste(in tonnes)

Ratio(in kg/vehicle)

HHO = home heating oil; NG = natural gas; LPG = liquefied petroleum gas

Greenhouse gases include carbon dioxide (CO2), nitrous oxide (N2O) and methane (CH4).

* PCA

EnErgy consumption(Manufacturing operations of the Automobile Division*) –

total watEr withdrawal by sourcE (Manufacturing operations of the Automobile Division*) –

dirEct grEEnhousE gas Emissions(Manufacturing operations of the Automobile Division*) –

total wEight of wastE by typE(Manufacturing operations of the Automobile Division*, excluding foudry waste and metal waste, nearly 100% of which is recycled) –

A more detailed presentation of the production plant environmental indicators may be found in the “Environment” chapter of the 2008 Sustainable Development Performance Indicators supplement.


90 / our performanCe > emPlOYee RelatiOnS inDiCatORS

emPlOYee RelatiOnS inDiCatORS

2002 2003 2004 2005 2006 2007 2008

Automobile Division (1) 133,880 135,180 139,480 140,050 140,000 134,345 129,890Banque PSA Finance 2,160 2,150 2,360 2,370 2,365 2,330 2,390Gefco 8,050 8,360 8,840 9,370 9,900 9,980 10,060Faurecia 52,230 51,860 54,430 54,960 57,810 59,765 58,140Other businesses (2) 2,280 2,360 2,140 1,750 1,675 1,430 1,220TOTAL 198,600 199,910 207,250 208,500 211,750 207,850 201,700

(1) Automobile manufacturing operations and Peugeot S.A. holding company.(2) SCEMM, PMTC France, PMTC Germany and PMTC Italy.

2002 2004 2006 2008 % increase 2002-2008

Operators 16,235 19,105 21,065 21,635 +33.3ETAM 14,420 16,655 16,175 15,610 +8.2Managers 4,245 5,325 6,320 6,310 +48.7TOTAL 34,900 41,085 43,560 43,555 +24.8

numbEr of EmployEEs undEr pErmanEnt or fixEd-tErm contracts by division, 2002-2008 (Consolidated Group, at 31 December 2008) –

top tEn nationalitiEs othEr than frEnch rEprEsEntEd in thE group (Consolidated Group, at 31 December 2008 – percentage of total workforce) –

EmployEEs undEr pErmanEnt or fixEd-tErm contracts by agE group and gEndEr(Consolidated Group, at 31 December 2008) –

numbEr of womEn EmployEEs undEr pErmanEnt or fixEd-tErm contracts (Consolidated Group, at 31 December 2008) –

German 5.6%

Spanish 11.1%

Mexican 1.6%North American 1.9%

Slovak 2.3%

British 2.4%

Portuguese 3.0%

Polish 3.1%

Argentine 3.2% Brazilian 3.4% < 20 20/29 30/39 40/49 > 500

10,000

Men Women

20,000

30,000

40,000

50,000

2,125 680

31,795

10,585

47,695

14,340

39,470

9,910

37,060

8,040

< 20 20/29 30/39 40/49 > 500

10,000

Men Women

20,000

30,000

40,000

50,000

2,125 680

31,795

10,585

47,695

14,340

39,470

9,910

37,060

8,040

/ 91

units 2008 2007 2006

Total payroll costs (in thousands of euros) 6,539,331 6,893,925 6,779,672

Employees under fixed-term contracts (average annual number) 10,760 10,775 9,890

Employees hired under permanent contracts 8,840 8,445 10,120

Operators 4,315 4,765 5,290ETAM 3,655 3,155 3,680Managers 870 525 1,150

Separation rates (% of total workforce) 8.3 10.2 4.9

Improvements in working conditions*

“Light” workstations (as a %, as rated by the Meteo method) 49 45 40“Medium” workstations 40 42 45“Heavy” workstations 11 13 15

Disabled employees 6,315 6,870 6,605

Operators (% of disabled employees) 82 83 N/A ETAM 15 14 N/A Managers 3 3 N/A

Training

Hours of training (in thousands of hours) 2,935 3,612 3,835

Work/life balance

Part-time employees 9,065 9,120 7,800Maternity leaves 1,645 1,615 N/A Paternity leaves 4,340 3,990 N/A

Parental leaves 1,010 885 N/A

* Manufacturing operations of the Automobile Division.

ETAM: Administrative employees, technicians, supervisors.

Sales units Manufacturing units

Frequency rate Severity rate Frequency rate Severity rate

European union 4.32 0.17 3.46 0.33Rest of Europe 1.55 0.02 – –Africa 0.00 0.00 – –South America 2.24 0.01 0.76 0.03Asia 0.00 0.00 – –TOTAL 4.07 0.15 3.21 0.3

othEr EmployEE rElations indicators (Consolidated Group, excluding Faurecia, at 31 December 2008) –

safEty pErformancE in 2008 (Manufacturing and sales units, Consolidated Group, excluding Gefco and Faurecia, at 31 December 2008) –

A more detailed presentation of the employee relations indicators may be found in the “Social and Society” chapter of the 2008 Sustainable Development Performance Indicators supplement.


92 / our performanCe > PRODUCtiOn faCilitieS / methODOlOgY

methODOlOgY

PRODUCtiOn faCilitieSassembly plants

Models produced as of 31 December 2008 2008 production

Aulnay (France) C2, C3 248,500Buenos Aires (Argentina) 206, 207, 307, 307 Sedan, C4, C4 Sedan, Berlingo, Partner 132,100Bursa* (Turkey) Bipper, Nemo 62,600Kolín* (Czech Republic) C1, 107 216,200Madrid (Spain) 207, 207 cc, C3 Pluriel 114,700Mangualde (Portugal) Berlingo, Partner 61,400Mizushima, later Okazaki* (Japan) 4007, C-Crosser 33,200Mulhouse (France) 206, 308, C4 276,000Poissy (France) 1007, 207, 207 SW 198,400Porto Real (Brazil) 206, 207, C3, Xsara Picasso 128,200Rennes (France) C5, C5 Tourer, C6, 407, 407 SW, 407 Coupé, 407 break, Xsara Picasso 229,900Sevelnord* (France) 807, C8, Expert, Jumpy 106,900Sevelsud* (Italy) Boxer, Jumper 110,600Sochaux (France) 307, 307 break, 307 SW, 308 cc, 308 SW, 308 break, 607, 3008 287,800Trnava (Slovakia) 207, C3 Picasso 185,900Vigo (Spain) Xsara Picasso, Grand C4 Picasso, C4 Picasso, Berlingo, Partner 439,600Wuhan* (China) 206, 307 Sedan, C2 China, C-Quatre, C-Triomphe, ZX, C-Élysée, Xsara Picasso China 172,600

* Joint or cooperative ventures.

This report comes with the 2008 Sustainable Development Performance Indicators supplement, which covers the economic, environmental, employee relations, social and governance aspects of the PSA Peugeot Citroën Group’s sustainable development performance in 2008.Additional information about the Group’s corporate responsibilities, the impact of its operations and the programmes undertaken to address these issues may be found on the sustainable development website, www.sustainability.psa-peugeot-citroen.com. Taken together, these publications make up PSA Peugeot Citroën’s Sustainable Development Report for 2008.For the third straight year, the report follows the third generation (G3) Sustainability Reporting Guidelines issued by the Global Reporting Initiative in October 2006. According to the criteria recommended in the “2008 Guidelines, Application Levels”, the Group’s own assessment of this report based on the GRI G3 guidelines results in a self-declared B+ application level.

Note 1: Scope and boundaryThe scope of reporting and consolidation methods for the indicators are described in the 2008 Sustainable Development Performance Indicators supplement.

Note 2: Independent assuranceAs PSA Peugeot Citroën’s Statutory Auditors, PricewaterhouseCoopers has expressed moderate assurance on the Group’s procedures for compiling:• Environmental data from its plants, offices and other sites.• Social data from the entire Group, except Faurecia.Their review of the processes used to collect and compile the report’s employee relations and environmental data has been published in its entirety at the end of the 2008 Sustainable Development Performance Indicators supplement.

Note 3: ContactFor more information, particularly concerning internal reporting processes, please write to the Sustainable Development Department, PSA Peugeot Citroën, 75, avenue de la Grande-Armée, 75116 Paris, France or by e-mail at [email protected]

mechanical components plants and foundriesAsnières (France) Hydraulic systemsCaen (France) Wheels, axles, suspension systems, transmissionsCharleville (France) Aluminium and iron castingsDouvrin*, Française de Mécanique (France) Petrol and diesel enginesHérimoncourt (France) Engines and gearboxesJeppener (Argentina) HDi diesel engines; wheels, axles, suspension systemsMetz (France) GearboxesMulhouse Mechanical Components Plant (France) Wheels, axles, suspension systemsMulhouse Metallurgical Plant (France) Aluminium pressure castings, forged steel components and toolingPorto Real (Brazil) Flex-fuel and gasoline enginesSaint-Ouen (France) Stampings, body in whiteSept-Fons (France) Iron castingsSochaux Mechanical Components Plant (France) Shock absorbers, wheels, axles, suspension systemsTrémery (France) Petrol and diesel enginesValenciennes (France) GearboxesXiangfan* (China) Petrol engines; gearboxes; wheels, axles, suspension systems

* Joint or cooperative ventures.

PSA PEUGEOT CITROËN / 2008 SuStainable Development anD annual RepoRt

largest carmaker in europe, with

13.8% of the market

manufacturer of light commercial vehicles in europe, with

19.9% of the market

2nd no.1vehicles sold worldwide

3,260,400

2_ Message from the Chairman of the Supervisory Board 4_ The Supervisory Board 6_ Interview with the Chairman of the Managing Board 8_ Executive Management 10_ Investor Relations 12_ Key Figures 14 - 19_ The Year’s Highlights

OUR AMBITION 22_ Fundamentals Driving Our Ambition 24 - 27_ Sustainable Development Approach

OUR BUSINESS 30 - 33_ Peugeot and Citroën 34_ 2008 Performance 36 - 40_ International Expansion 41 - 43_ Other Businesses

OUR COMMITMENT 46_ Translating Needs into Products 48 - 53_ Vehicles and the Environment 54 - 57_ Manufacturing and the Environment 58 - 67_ Social Responsibility 68 - 75_ Corporate Citizenship

OUR PERFORMANCE 78 - 83_ Financial Indicators 84 - 87_ Product Indicators 88_ Production Plant Environmental Indicators 90_ Employee Relations Indicators 92_ Production Facilities / Methodology

ContentS

Indicates PSA Peugeot Citroën’s 10 sustainable development objectives for 2008-2011.FCBA-COC-000057

available on the CD-Rom• The 2008 Sustainable Development Performance Indicators supplement

• The 2008 Registration Document, filed with the Autorité des Marchés Financiers on 24 April 2009, is available upon request from: Investor Relations – 75, avenue de la Grande-Armée – 75116 Paris, France

Phone: 0810 424 091 (France only, charged at local rate) – Email: [email protected]

• Notice of Meeting for the Annual Shareholders Meeting

Photos: Front cover: C-A. D’Autichamp – P. Legros – P. Ollive • p. 2: M. Moore • p. 5: M. Moore – N. Zwickel • p. 7: M. Moore • p. 9: M. Moore – P. Legros – S. Meyer – N. Zwickel – Corporate Communications, China – Corporate Communications, Brazil – D. Pizzalla • p. 14: S. Muratet – J. Lejeune – Corporate Communications, China • p. 15: N. Zwickel – S. Muratet – G. Ricciardi • p. 16: M. Moore – C-A. d’Autichamp – S. Meyer • p. 17: BMW – S. Meyer – J. Stehlin – Peugeot Motorsports • p. 18: J. Lejeune – P. Legros – M. Suning • p. 19: Citroën Motorsports – Boyko – L. Nivalle • p. 20/21: P. Sautelet • p. 22: P. Legros • p. 23: P. Sautelet • p. 24: S. Meyer – S. Muratet – N. Zwickel • p. 25: IVM • p. 28: J. Lejeune • p. 29: Corporate Communications, Citroën • p. 31: P. Sautelet – P. Legros • p. 32: Corporate Communications, Citroën • p. 33: J. Lejeune – Corporate Communications, Citroën • p. 35: S. Foulon • p. 36: J. Lopeteguy • p. 37: G. Ricciardi • p. 38: M. Suning • p. 39: L. Can-Yun – Corporate Communications, China • p. 40: F. Spilka • p. 41: Gefco • p. 42: P. Legros • p. 43: Faurecia • p. 44/45: L. Nivalle • p. 49: F. Pitchal – P. Legros • p. 50: J. Lejeune • p. 51: A. Bernier • p. 53: M. Ech Charqi – S. Meyer • p. 56: S. Meyer • p. 57: C. Pihery • p. 58: D. Pizzalla • p. 59: P. Legros • p. 60: N. Zwickel • p. 61: Corporate Communications, Trnava • p. 62: P. Legros • p. 63: J. Lejeune • p. 64: S. Meyer • p. 65: Corporate Communications, Metz • p. 66: R. Degoul • p. 67: N. Zwickel • p. 68: J. Lejeune • p. 69: J. Stehlin – P. Sautelet • p. 71: D. Pizzalla • p. 72: J. Lejeune • p. 73: J. Stehlin • p. 75: Corporate Communications, Poissy – J. Stehlin • p. 76: A. Bernier • p. 77: P. Sautelet • Back cover: C-A. D’Autichamp – P. Legros – S. Foulon.

Design and writing: PSA Peugeot Citroën Corporate Communications. Creation, production and printing:

3,000 copies of this Sustainable Development and Annual Report have been printed on FSCTM-certified Creator Silk paper, made exclusively with fibres from responsibly managed forests. Vegetable-based inks made from renewable raw materials were used. The printer, which has earned both Imprim’Vert and FSCTM certification, has committed to taking continuous, tangible action to reduce harmful emissions, while saving natural resources.

Peugeot 207 front wing

Incorporated in France with issued capital of e234,048,798 Governed by a Managing Board and a Supervisory Board

Registered Office: 75, avenue de la Grande-Armée - 75116 Paris, France R.C.S. Paris B 552 100 554 – Siret 55 2 100 554 00021

Phone: + 33 (0)1 40 66 55 11 – Fax: + 33 (0)1 40 66 54 14

www.psa-peugeot-citroen.com – www.sustainability.psa-peugeot-citroen.com

Interior of the Citroën Hypnos

concept car

Milling a component of the Citroën Grand C4 Picasso mock-up

Peugeot Boxer taillight

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2008 annual report psa

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