PSA Peugeot Citroen open to possible alliance image

French auto giant PSA Peugeot Citroen does not rule out the possibility of forming an alliance with a competitor, the group’s head of brands said on Thursday.

The carmaker is fighting a drop in sales and a deteriorating market conditions in Europe. The comments were made amid increasing speculations that PSA could tie up with another carmaker such as Fiat.

“We do not exclude the possibility of accelerating what we’re doing now through a bigger alliance, it’s just that this alliance would need to meet a certain number of conditions – it should be in line with our strategy, it should yield real synergies and the group should remain independent,” PSA head of brands Frederic Saint-Geours was quoted as saying by Reuters.

A few year ago, alliance talks between PSA and Japan’s Mitsubishi failed. Analysts are skeptical of the benefits of any tie-up. “We wonder just what the merits of a tie-up with PSA might be, as both companies largely share the same set of problems and combining the two businesses will do nothing to address them,” Credit Suisse analyst David Arnold told Reuters.

Europe’s second-biggest car maker after Volkswagen said its global car sales fell 1.5 percent last year to 3.5 million.