Fiat have issued strong denials this week that they are currently involved in negotiations with up to two new potential joint venture partners, and that they are considering terminating their present arrangement with GM.

Italian newspaper speculation, quoting unnamed sources, centers around a much more wide ranging partnership with the French PSA Peugeot Citroen Group, with whom they already have a long running and highly successful joint venture in the light van segment. A second potential partner, also said to be in the frame, was not hinted at by the reports.

Fiat are rumoured to be unhappy with their current joint venture with the giant US-carmarker, General Motors, particularly with their engines to transmissions partnership, Powertrain.

Fiat Group CEO Sergio Marchionne is believed to have hinted that he sees the GM situation as holding back the automotive division's attempts to return to profitability, and that he will raise the idea of unraveling the tie-up when he meets seniors GM executives at their next scheduled meeting on December 14th.

The Fiat-GM relationship has been hindered by the infamous 'Put' option that hangs over the two company's attempts to work together.

Originally scheduled for exercise in January 2004, it was then put back to January 2005. Under its terms, Fiat can force GM to buy the remaining shares in Fiat that it does not own, although GM's lawyers counter that since its inception, wide ranging restructuring changes to the Fiat Group, including the chunk of asset disposals, have now negated its original terms.
 

The December meeting between top executives from Fiat and GM will come on the day before a moratorium on legal action between the two companies expires, and as the January 2005 'put' option exercise date looms into view.

Fiat strongly deny that they are seeking to ditch their arrangement with GM, which apart from the Powertrain venture, offers them a role in joint purchasing.

"Fiat and General Motors have an industrial and financial alliance and there are no similar talks going on with other automakers," a spokesman reiterated yesterday.

The La Repubblica report argues that Fiat believe they can obtain greater synergies with Peugeot-Citroen that is on offer with GM. The long running light commerical joint venture, which was recently renewed to take it forward to the middle of the next decade, has been a success for both parties.

This programme includes the best selling Ducato van, and the smaller Scudo, both of which are offered in a myriad of different formats.

Certainly new Fiat Group Chief Executive Officer Sergio Marchionne, regarded as a tough operator, will be looking at all the options available as negotiations once again start to swirl around the controversial 'put' option.