To leverage the combined strengths and capabilities, General Motors and PSA Peugeot Citroen announced a long-term strategic alliance.

The alliance has two main goals: 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. Each company will sell its vehicles independently and on a competitive basis, but combined annual purchasing volumes goal is $125 billion.

This helps both parties to achieve cost savings, gain efficiencies, leverage volumes and advanced technologies, and reduce emissions. Sharing of platforms not only enables global applications, it also permits both companies to execute Europe-specific programs with scale and in a cost effective manner.

As a part of the alliance, GM plans to acquire a 7 percent equity stake in PSA Peugeot Citroën, making it the second largest shareholder behind the Peugeot Family Group. PSA will raise approximately €1 billion from the deal.

A new common platform for low emission vehicles is also being considered, with the first vehicle expected to launch by 2016.

“This partnership brings tremendous opportunity for our two companies,” said Dan Akerson, GM chairman and CEO. “The alliance synergies in addition to our independent plans, position GM for long-term sustainable profitability in Europe.”

Philippe Varin, chairman of the managing board of PSA Peugeot Citroën, declared, “This alliance is a tremendously exciting moment for both groups and this partnership is rich in its development potential. With the strong support of our historical shareholder and the arrival of a new and prestigious shareholder, the whole group is mobilized to reap the full benefit of this agreement.”