PSA Peugeot Citroën and General Motors have formed an alliance. The move will see the US carmaker buy a 7% stake in PSA as part of a share issue by the French automaker. GM says it expects to spend from $400 million to $470 million on that.

“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,” said GM CEO Dan Akerson. But “each company will continue to market and sell its vehicles independently and on a competitive basis,” the statement added.

The scope of the alliance includes 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 with combined annual volumes of approximately $125 billion. Bigger buyer gets better deals, as always.

There is also talk on joint development. GM and PSA said the alliance will at first focus on small and midsize vehicles, MPVs and crossovers. The carmakers may also develop a new common platform for low emission vehicles, with the first model expected to debut in 2016.

Cost savings from the deal will be limited in the first two years, but will eventually amount to $2 billion annually, split equally, the companies said. The deal is expected to close and take effect by the second half of this year.

GM is certainly not new in linking up with other companies. The US carmaker had shares in Suzuki Motor Corp, Isuzu Motors and Subaru maker Fuji Heavy Industries before disposing off the stakes few years ago. In the same period, but in Europe, GM had to pay Fiat to end an unsuccessful alliance. They also flirted with Renault-Nissan before. GM’s Opel brand is not doing well at all in Europe, and this move has it in mind.

On the other hand, Peugeot has a better track record with other carmakers, including JVs to build commercial vans with Fiat and an engine partnership with BMW. PSA also makes diesel powertrains with Ford and sells Mitsubishi models in Europe with its own face and badge.