Tony O'Kane | Dec 16, 2008

Italian automaking conglomerate the Fiat Group is reportedly considering a corporate partnership with French counterparts, PSA Peugeot Citroen.

Fiat Group CEO Sergio Marchionne is eager to join forces with PSA, and has said that the company will need to form an alliance with another corporation if it is to survive the current severe economic downturn. Fiat's profits for this year are expected drop by up to USD$510 million, however a partnership with PSA could help insulate it from rapidly changing market conditions in the future.

An alliance between the Fiat Group and PSA would produce an automaking corporation that would rival the dominant Volkswagen Group and Renault-Nissan for vehicle output. Aside from Peugeot, Citroen and Fiat, if the proposal progresses beyond the Fiat boardroom, other marques that would fall under the resulting parent company would include the likes of Ferrari, Maserati, Lancia and Alfa Romeo, as well as truck specialists Iveco.

However despite Marchionne's enthusiasm for an alliance, PSA representatives have previously said that the French automaker is not looking for a new partner.

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