For decades it was regarded as inevitable that Europe's six volume carmakers would consolidate. But it never happened. Now, with the region's economy in shambles, the time may have arrived. But who would partner with whom as companies try to withstand the market meltdown? And who would be left standing alone?
Confirmation that General Motors' Opel and France's PSA Peugeot Citroen are in talks about a strategic tie-up sounds like bad news for Fiat. The Italian company, and Chrysler's owner, could lose two potential partners.
Chrysler-Fiat CEO Sergio Marchionne said in January he would "certainly take a look" at PSA. And three years ago he showed an interest in Opel during the GM bankruptcy.
And what happens to PSA's multiple alliances: two 50/50 joint ventures with Fiat and one with Toyota; diesel engines built with Ford; gasoline engines with BMW; and six rebadged Citroen and Peugeot models coming from Mitsubishi.
As for GM, this wouldn't be the first time it has linked up in Europe. In 2000 it bought 20 percent of Fiat Auto for $2.4 billion.
Five years later GM paid Fiat $2 billion to cancel a put option that allowed Fiat to force GM to buy 80 percent of Fiat group's automotive operations.
Could GM fare better with a partner this time? An alliance of Opel and PSA would give economy of scale, but indications were that it would not be an equity partnership. So the overcapacity problem that both money-losing European companies are struggling with likely would remain unsolved.