Volkswagen and Fiat Chrysler are reportedly considering combining some vehicle production in an effort to reduce costs.
The Wall Street Journal reports that the companies are focused on jointly making light-utility vehicles primarily solid in Europe, potentially including VW's Caddy panel van and Amarok pickup truck. Fiat Chrysler makes similar models for the continent in the Doblo van and Fullback pickup.
Fiat Chrysler CEO Sergio Marchionne, who is set to step down next year, continues his years-long campaign to sell the company to a larger automaker, but Volkswagen reportedly is not interested in a complete acquisition amid its diesel emissions scandal and efforts to bolster electric powertrains and autonomous technology.
Instead, VW hopes to increase the scale of its light-utility vehicles, which would ease costs as well as expand its market reach.
Fiat Chrysler, meanwhile, would gain access to VW's vehicle technology under that type of partnership, and both companies would share development costs.
Sources familiar with the matter told the Journal that the talks are in their early stages and that the exact scope of a potential production agreement remains unclear.