With a freshly inked deal with Chrysler, many analysts are speculating that without the stability of Opel backing up the allaince, Fiat may find itself on shaky ground. Equity analysts have described Chrysler as the weakest link in Fiat's current expansion strategy and an alliance with PSA could help Fiat find its feet again, reports Automotive News.
Fiat CEO Sergio Marchionne's eagerness to gobble up as many companies as possible isn't surprising, considering his theory that the global economic crisis will wipe out all but six automakers, leaving just a few major European brands. This largely explains Marchionne's desire to swallow companies like Opel, but if PSA and Fiat were to team up, the results would be even more grand than the potential Fiat-Opel tie up - with possible sales for the combined brand reaching as high as seven million units.
But forging an alliance with PSA might turn out to be more difficult than originally thought, especially considering the French government's recent cash stimulus of €3 billion to the struggling PSA. Additionally, other companies have sought alliances with PSA with little success, partly due to PSA's desire to remain independent.
Should both the options of Opel and PSA fall through for Fiat, then Marchionne may find himself at the negotiating table with another GM brand - the small volume Swedish brand Saab. Failing to strike a deal with Opel and PSA would leave Fiat in a precarious position, and absorbing Saab's struggling business may not be the best manoeuvre for Fiat but it may have no other choice at that point.