General Motors and PSA Peugeot-Citroën have officially announced plans to create a global automotive alliance.

Designed to leverage the combined strengths of both companies, the alliance will focus on two key aspects: shared platforms and a global purchasing joint venture for sourcing commodities and other goods from suppliers.

More specifically, GM and PSA Peugeot-Citroën will share selected platforms, modules and components on a worldwide basis in order to achieve "cost savings, gain efficiencies, leverage volumes and advanced technologies and reduce emissions." Their efforts will primarily focus on small and midsize passenger cars, MPVs and crossovers. If everything go according to plan, the first model on a shared platform will be launched by 2016.

As part the agreement, PSA Peugeot-Citroën is expected to raise approximately €1 ($1.3) billion through a capital increase with preferential subscription rights for shareholders. GM, on the other hand, will acquire a seven percent stake in PSA Peugeot-Citroën.

In a statement, GM CEO Dan Akerson said "This partnership brings tremendous opportunity for our two companies. The alliance synergies, in addition to our independent plans, position GM for long-term sustainable profitability in Europe."

His sentiments were echoed by PSA Peugeot-Citroën's Chairman of the Managing Board Philippe Varin who commented "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."