GM and PSA tie-up announced

General Motors and PSA Peugeot-Citroen have announced a new alliance that will see the companies co-develop future models.

As part of the "long-term and broad-scale global strategic alliance", GM takes a seven per cent stake in PSA Peugeot-Citroen, making it the second largest shareholder. PSA is also expected to raise around one billion Euros through a share issue.

The agreement means the companies will share platforms to reduce development costs. They will also create what they describe as a "global purchasing joint venture for the sourcing of commodities, components and other goods and services".

The initial focus will be on developing "small and midsize passenger cars, MPVs and crossovers", but a shared platform for low-emission vehicles is also being considered.

The first car to use a co-developed platform will arrive in 2016. GM says the new alliance could amount to annual savings of 2 billion Euros within five years.