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SHANGHAI — General Motors and the SAIC Motor Corp. in China will work together to build a new small-displacement gasoline engine and an advanced transmission, two technologies officials said can help boost fuel efficiency and cut down on carbon-dioxide emissions in vehicles.

GM vice chairman of global product operations Tom Stephens and SAIC president Chen Hong signed the agreement Tuesday in Shanghai. Officials said the deal marks a major step in the two companies growing their powertrain development partnership.

"The co-development of these new engines and transmissions builds on a strong history of innovation and collaboration between GM and SAIC Motor," Stephens stated. 

"Together, we will continue to quickly provide our customers leading-edge technologies that improve vehicle fuel efficiency and deliver robust performance," he added.

The small gas engine will be available in a displacement range of 1.0 liters to 1.5 liters. Officials said it can offer "unparalleled" fuel economy and performance. Its design is "compact" and "lightweight" and blends direct injection and turbocharging.

Engineers at both GM and SAIC will collaborate to design and develop the engine. This will be done in Detroit as well as the Pan Asia Technical Automotive Center in Shanghai, which is the engineering and design joint venture the companies share.

As far as the new front-wheel-drive transmission, the companies said it can boost fuel economy by as much as 10 percent when compared to the typical six-speed automatic transmission.

The transmission, which will utilize dry, dual-clutch technology, is designed to offer the same level of shift comfort found in a conventional fully automatic transmission. Not only that, it can offer "superior quality" and cut back on carbon-dioxide emissions.

Officials said blending these two technologies in a vehicle can cut carbon-dioxide emissions by as much as 20 percent versus the engines and automatic transmissions China currently builds.

"These development agreements open an exciting new chapter in the partnership between SAIC and GM," noted Hu Maoyuan, chairman of SAIC Motor.

"Not only will they add critical green technologies to our next-generation vehicles, they will also build on the strong engineering capabilities forged as a part of GM and SAIC's corporate responsibility," Maoyuan continued.