Is Volkswagen Group planning to buy Fiat-Chrysler?

Volkswagen-GroupNews is emerging in Germany that Volkswagen Group may be holding talks on a possible takeover of Fiat-Chrysler.

The surprise takeover speculation is being reported by Germany’s Manager Magazin, which says that negotiators for the two groups have already been in discussion about a possible deal.

While almost incomprehensible at first, the deal does have plenty of sound logic behind it; Fiat-Chrysler is struggling with Fiat’s much-needed recovery, relying on the profits from Chrysler to prop up the group. Alfa Romeo has been in a long decline too and still shows little signs of progress.

Volkswagen Group, meanwhile, is struggling in America, despite plentiful investment over recent years. The same markets that Chrysler calls its own (and where the US brand has an enormous distribution network). There are therefore numerous synergies in any possible deal.

The Italians, adds Manager Magazin, would rather concentrate on the highly profitable Ferrari and Maserati brands anyway; recent results with both brands proves they have a clear understanding of how to manage them.

Any deal is, at the moment, far from feasibility and there remain innumerate hurdles in the way. We can’t begin to image what the price would be, for one (although Volkswagen Group does have cash reserves of €18 billion). But if these rumours are correct, one of the biggest shakeups in the global car industry could be on the distant horizon.

Ferdinand Piech has long expressed his desire to secure the Alfa Romeo brand for Volkswagen Group. With this deal, he’d get three for the price of one.