General Motors and PSA Peugeot Citroen have announced the creation of a strategic alliance.
The agreement will lead to the sharing of vehicle platforms, components and modules and the creation of a global purchasing joint venture for the sourcing of commodities, components and other goods and services from suppliers.
The platform sharing plans will initially focus on small and midsize passenger cars, MPVs and crossovers. The companies will also consider developing a new common platform for low-emission vehicles. The first vehicle on a common platform is expected to launch by 2016.
Each company will continue to market and sell its vehicles independently and on a competitive basis.
As part of the agreement, GM plans to acquire a seven per cent equity stake in PSA Peugeot Citroën, making it the second largest shareholder behind the Peugeot Family Group. However, GM will have no say in the running of the company.
The shares bought by GM are part of a larger number being offered for sale by PSA Peugeot Citroën, as it seeks to raise around $1 billion to fund investments. The company's market value based on its current share price is $3.6 billion.
In addition, the alliance is exploring areas for further co-operation, such as integrated logistics and transportation.
GM and PSA Peugeot Citroën estimate the alliance will provide joint savings for the companies of $2 billion annually within five years.