As Fiat Chrysler Automobiles (FCAU) renews its "for sale" and "marriage partner wanted" pitch, the silence from potential partners such as General Motors (GM) , Ford (F) and Volkswagen (VLKAY) grows more deafening.
One constituency that hasn't been heard from -- publicly, anyway -- is the Chinese auto industry, whose members have shown sophistication and resources as they've begun to explore overseas markets. A merger or alliance between FCA and a company like Beijing Auto, BYD (BYDDY) or First Auto Works could be a stunning win for both sides.
A Chinese automaker instantly could gain access FCA's brands -- Jeep, most notably -- as well as the highly profitable North American pickup truck business and Chrysler's minivan franchise. FCA would gain much needed capital, and advanced technology, such as BYD's electrification know-how.
Obstacles to such an agreement would have to be overcome, of course.
John Elkann, FCA's chairman, last week revived the invitation for another automaker to join forces with his company in a letter to shareholders, prior to FCA's annual meeting in Amsterdam. He more or less repeated the rationale that Sergio Marchionne, FCA CEO, first raised last year in regard to GM. GM said it wasn't interested.
At the North American Auto Show in January, Marchionne hinted at talks with some potential partners, without identifying them. Rather than look for a merger, he said, he was concentrating on fulfilling corporate goals to be achieved by 2018.
"We've had expressions of interest from more than one party over the fact that they were interested in pursuing the discussions," he told the Detroit Free Press. "We had to make a choice as to whether they offered us enough of an upside to engage."
Were any of the interested parties Chinese? It's not out of the question. Chinese automakers are looking for Western customers, though Chinese brands -- or newly invented brands -- would face tough sledding against BMW, Chevrolet, Ford, Toyota (TM) and other names with tremendous equity.
One Chinese enterprise, Zhejiang Geely Holding Group, solved the problem by buying the well-known and respected Volvo car company and brand from Ford in 2010. With investments by Geely of $11 billion, Volvo is well on its way to enlarging its market position, including the announcement of a new assembly plant in South Carolina.
Could a similar arrangement be made between a Chinese automotive enterprise and FCA? One serious obstacle is rooted in the politics of a U.S. automaker -- bailed out by the U.S. government following its 2009 bankruptcy -- being bought out or refinanced by a Chinese company. Surely during a presidential election season, neither party will bless an arrangement that could result in diminished U.S. production by FCA, a possible outcome of any merger.
But FCA sorely wants to make a deal before the U.S. automotive market enters its next and inevitable down cycle. Once sales and profitability fall, FCA will have less leverage to make a deal with a partner on favorable terms.
After the U.S. gets a new president this November, watch for more merger talk -- and possible activity -- from Marchionne and Elkann. And don't be surprised if a future merger partner hails from the People's Republic of China.