Audi is said to be negotiating the purchase of Fiat's Alfa Romeo brand, according to reports out of Europe this week.
Industry news source WardsAuto cites unnamed sources close to both parties, and the negotiations reportedly include Fiat’s Pomigliano manufacturing plant.
This plant was built in the 1960s for the purpose of producing Alfas, but is currently used to produce Fiat’s Panda city car.
Also tipped to be among the negotiations is the Magneti Marelli parts division, after Fiat boss Sergio Marchionne previously flagged a possible sale.
Audi has conversely signalled its desire to acquire a components manufacturer, and to shift some of its development activities to Italy, where it now controls Lamborghini, Ducati, and design house Italdesign.
Both Audi and Fiat have refused to confirm the discussions however.
"We do not comment on speculative rumors," Fiat spokesman Richard Gadeselli said
A spokesman for Audi also denied the negotiations: "There is no substance in the news,” Juergen De Graeve said.
Marchionne has previously asserted that Alfa is not for sale, outlining a plan in November last year to introduce nine new Alfa Romeo models by 2017, with the goal to lift annual sales from 100-300,000 units over the same period.
However, the sale of Alfa could help fund the completion of Fiat’s acquisition of Chrysler, which currently hinges on the purchase of remaining shares held by the United Auto Workers union (UAW) in the US.
While brand tragics would prefer Alfa to remain under Italian ownership, the cementing of the wider Fiat/Chrysler alliance is crucial to securing the long-term future of both Fiat and Chrysler.