This week General Motors’ investment arm, GM Ventures, announced a stake in the NanoSteel Company, Inc., an innovator in nano-structured steel material designs that could lead to lighter weight vehicles with improved fuel economy and un-compromised safety.

As the General along with other automakers seeks to meet tough CAFE regulations imposed by the Obama Administration in coming years, it is positioning itself now to benefit from new lightweight materials and manufacturing processes to produce vehicles that outperform their predecessors.

NanoSteel says its new class of steel made through the development of patented alloys more than fits this criteria as it allows automakers to continue working with familiar steel and avoid having to refit a plant for new manufacturing techniques.

“NanoSteel’s new steel design is an alternative to other light-weighting materials which may cost more, require new investment in parts production and have performance limitations,” says NanoSteel.

The 10-year-old company says its nanosteel allows automotive engineers and designers to reduce weight through the use of thinner, higher strength gauges while maintaining the structural integrity needed for safety.

Although GM so far hasn’t disclosed the exact dollar amount of the NanoSteel investment, it does enable the NanoSteel to complete its Series C round of financing and joins previous investments by EnerTech Capital, Fairhaven Capital Partners and five other shareholders.

“We are investing in NanoSteel because of the opportunity associated with their new steel alloy technology,” said Jon Lauckner, GM’s chief technology officer and president of GM Ventures. “Over the next several years, light-weighting of vehicles will be a major focus area to improve fuel economy. NanoSteel’s nano-structured alloys offer unique material characteristics that are not available today, making them a potential game-changer.”

Dave Paratore, president of the NanoSteel Company, Inc., said the company is heartened by an investment by the world’s largest automaker’s investment arm, and said it should be mutually beneficial.

“GM Ventures investment in NanoSteel demonstrates its confidence in our company’s potential to achieve widespread impact on the auto industry through our proprietary steel designs.,” said Paratore . “With the support of General Motors’ automotive expertise and technology leadership, we can accelerate the final phases of development of our nano-structured AHSS in the quest to economically lightweight vehicles.”