General Motors is deepening its ties with Chinese car-maker SAIC.
They announced in Shanghai that they will work together on developing small vehicle engines and transmissions that use less fuel.
It is a further expansion of a successful 13-year partnership.
When asked, SAIC’s Chairman would not comment on whether his company might invest in GM via its upcoming initial public offering of shares.
Hu Maoyuan said they would first have to study the details of the IPO.
At the end of last year, the two firm set up a joint venture to make small cars and commercial vehicles in another growth market – India.
The latest deal paves the way for GM to meet demand for small city cars in emerging markets and cut the costs of developing fuel-saving technologies for the US market, where it faces the challenge of meeting tough new fuel economy standards by 2016.