Volkswagen chief turns down Fiat Chrysler boss’ call for a merger

Earlier this week, Marchionne told Bloomberg and other media outlets at the Geneva motor show that he had "no doubt that at the relevant time VW may show up and have a chat" about a merger between the two automakers.

A day later, Matthias Mueller, CEO of the Volkswagen Group, responded, telling Reuters, "We are not ready for talks about anything ... we have other problems", referring to the aftermath of the Dieselgate scandal.

These latest industry machinations have taken place in the wake of the PSA Group's purchase of GM's European operations at the beginning of the week.

The combined automotive entity encompassing the Citroen, DS, Opel, Peugeot and Vauxhall brands will have a combined European market share of around 17 per cent, placing it second behind the Volkswagen Group.

In 2015, Marchionne aggressively pursued a tie-up with General Motors via both private back channels and bold statements to the media.

At the Geneva motor show, Dan Ammann, president of General Motors, told journalists, "We weren't interested before and we're even less interested now".

Should a Volkswagen and Fiat Chrysler merger ever take place, the combined group would have a headache-inducing number of brands to manage. The Volkswagen Group already consists of Audi, Bentley, Bugatti, Lamborghini, Porsche, Seat, Skoda, and Volkswagen. A merger would bring Alfa Romeo,Chrysler, Dodge, Fiat, Lancia, Jeep, Maserati, and Ram into the fold.

There would be significant overlaps between the two automakers, with the two holding significant market shares in Latin America. The Volkswagen Group is the dominant auto group in Europe with a 24 per cent market share, with FCA accounting for around 7 per cent of the European pie.

Where Volkswagen would likely benefit the most is in the USA. Ever since the original Beetle exited that market, the German marque has struggled to be more than a small player in the land of the free.

Currently, FCA's profits are buoyed by the profitability and popularity of its Jeep SUVs and Ram pickup trucks.

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