General Motors Company and SAIC Motor Corporation Limited have signed an agreement to expand their partnership to develop a new small-displacement gasoline engine family and an advanced transmission.

The two companies said in a joint statement that the agreement represents a significant milestone that expands their relationship into power train development.  It's another key step in providing propulsion solutions to build the world's best vehicles.

The new small gasoline engine, which will be offered in displacements from 1.0 liters to 1.5 liters, will reportedly be used by GM and SAIC in China and worldwide in the future.

The new front-wheel-drive transmission will incorporate the latest innovations for improving fuel economy and performance. The transmission alone will provide upward of 10% improvement in fuel economy over today's conventional six-speed automatic transmissions.

When combined, these technologies can apparently provide up to 20% improvement in CO2 emissions, compared to engines and automatic transmissions in production today in China.