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Interview: Guillaume Faury, Executive VP Research and Development, Member of the PSA Managing Board

As well as joint purchasing and logistics, the alliance agreement between PSA Peugeot Citroen and General Motors calls for closer collaboration between the two organisations on R&D. In this interview with Automotive World, PSA’s head of R&D, Guillaume Faury – who is also a member of the GM-PSA Alliance Steering Committee – provides insight into PSA’s … Continued

As well as joint purchasing and logistics, the alliance agreement between PSA Peugeot Citroen and General Motors calls for closer collaboration between the two organisations on R&D. In this interview with Automotive World, PSA’s head of R&D, Guillaume Faury – who is also a member of the GM-PSA Alliance Steering Committee – provides insight into PSA’s views on vehicle electrification, lightweight materials and telematics; he also discusses the role of PSA’s R&D activities in light of the alliance with General Motors. This interview was conducted shortly before the joint announcement by GM and PSA on four collaborative vehicle projects.

Automotive World: Is the cost cutting at PSA having any impact on your R&D budget?

Guillaume Faury: The average annual R&D spending in the group in recent years was around €2bn. In 2011, a year with high R&D expenditure, we spent €2.2bn. At the same time, we made a high number of investments, like the new three-cylinder EB engine family with the naturally aspirated 1.0 and 1.2-litre, and the engine with the turbo version next year. A new engine family is something we do every ten to 15 years, so it’s a major investment. We’ve also made international investments in Russia, at Kaluga; in China, in our joint ventures, including the new one called CAPSA [Changan PSA], where we have invested in a new car plant, and a new engine plant; and we have increased capacity in South America.

Over the next year, as this investment curve reduces, we will maintain R&D at a level close to €2bn.

Peugeot Onyx concept

AW: As the spending pattern changes, will the R&D focus also change?

GF: We will continue to boost R&D in key areas like environment, design, style, telematics and connectivity services, at a speed which is consistent with our product range. But we will remain within the current footprint of the group, and consolidate the results of internationalisation in China, Russia, South America, and we need to solve the profitability issue we have in Europe.

That’s the way we intend to deal with it. This is what we have called Rebound 2014, with a €1.5bn (US$1.94bn) plan, including the reduction in investments, the saving plan that we have communicated recently, and, at the end of the period, savings and cost reductions coming from the alliance [with GM].

AW: What level of R&D collaboration do you anticipate with General Motors?

GF: We have three main areas of collaboration embedded in the alliance agreement with GM. The first is on logistics; the second is on a joint procurement organisation, and we are awaiting anti-trust approvals in certain key countries; the third is on R&D, and the agreement also provides for further co-operation on four projects. Then the alliance provides a platform for other areas of co-operation, including, but not limited to, R&D technologies.

Citroen Tubik concept

AW: What has been the response to the HYbrid4 range since its launch, and how do you see that programme developing?

GF: This programme has been more successful than we had expected. The sales figures are as we had expected, but in the meantime, the market has shrunk. So in terms of take-rate, it has exceeded our expectations. In terms of volumes, it is more or less as we had expected for this year. We continue to envisage sales volumes of around 20,000 PSA hybrids this year in Europe. Next year, it should reach between 30,000 to 40,000 units. And the feedback from customers is very good, so we are satisfied with the start of the programme. We now have close to six months’ experience selling those cars.

We strongly believe, as we have been saying in recent years, that vehicle electrification is a long-term trend, one that will not change. It drives a lot of complexity because there of the number of feasible solutions in the market. So electrification is driving costs up and it is driving industrial competitiveness down. There is a need to converge some standard technologies, something which is not yet happening. We believe there will be a significant level of hybridisation on large cars, due to the need to reduce CO2, and that might be combined with diesel much more than we originally expected. We decided to do it, but we now see other OEMs going in that direction, at least in Europe. Solutions for small cars will most probably be in the area of what we call eco-hybrids: low voltage, mild hybrids which will mainly contribute to low CO2, and not that much to other features like four-wheel drive or pure electric. This is the area where we think things will move. Electrification of the car is a long-term movement, there is no doubt. Those technologies need to be mastered, and to be designed into the architecture of the car.

AW: How important is EV battery technology to PSA? Do you intend to bring EV technology in-house, or will you continue developing battery electric vehicles with Mitsubishi or another partner?

GF: We do not intend by any means to go into the battery business. We think it has to remain in the hands of the battery manufacturers, especially the cell technologies. We don’t intend to be in that business. But we want to be in system architecture, because this is the key to mastering the performance, costs, and the unique selling proposals of the brands.

Peugeot 3008 HYbrid4

AW: What is PSA doing to increase the use of lightweight materials like aluminium, and new generation materials like carbon fibre?

GF: Weight saving is a very strong contributor to lower CO2 and reduced fuel consumption. We are already on this path with our cars – the 208 is on average 110kg lighter than the 207 it is replacing. It’s a big move, but we did something very similar when we went to the 508 from its predecessor, where the saving was over 100kg. We want to continue to reduce the weight by, on average, 100kg per generation, which means every three years for a given segment. To do that, it means working on the architecture of the car, of course, using lightweight equipment and lightweight structures. From that perspective, we are working on composites and plastics, including for structural parts. On the car that we will launch next year, there will be a significant share of plastics and composites. We are not very keen on carbon fibre, because carbon fibre is very expensive. We think glass fibre is much more appropriate, with materials which are non-homogenous, using fibres only where necessary to reduce costs. So we are working with manufacturers and suppliers to optimise the weight-to-cost ratio of these components, and they are developing specific technologies. Going to full carbon is not appropriate for us because it’s too expensive.

AW: At the 2012 Paris motor show, PSA once again showed spectacular concepts, in particular the Peugeot Onyx. How important are concept cars to PSA’s brands? In terms of R&D and future development, what role do they play?

GF: They are absolutely key to the brands, because they communicate to everybody the direction in which we are going. They inspire designers and engineers. Testing features and design direction on the public is something which really matters to us. Concept cars are not just for fun!

AW: Funding has to come from somewhere for those concepts to be developed. Does it come out of your R&D budget?

GF: Yes, it’s part of our annual costs. PSA Group R&D is in charge of design of advance concepts, of new technologies, of new projects, of co-operations – everything that relates to development.

AW: How involved does PSA get in the development of telematics technology? Do you develop this or do you bring in outside partners to collaborate?

GF: Both. We need to integrate it into our vehicles, so our role is developing the architecture. We use the technologies, equipment and solutions which have already been developed or which are being developed by suppliers using their R&D and their investment power. The next generation of equipment will be platforms that have been developed by, and are currently being developed by, a major equipment manufacturer, using all the features that have been developed for several car manufacturers.

What we want to master is the services that we will offer, the business model, all the applications that we want to have, and the way the customer will interface with the telematics. We think it’s our responsibility. It’s about safety when driving the car, when using the telematics. And we want to offer an open system that can support apps, but we want to control the apps that will be made available to the customer.

AW: And you need to make some money…

GF: Yes, but for us it’s about making sure that what we are selling to the customer is fit for function.

Martin Kahl is Editor, Automotive World

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