France's largest carmaker PSA Peugeot Citroen said Thursday it may form an alliance with another auto group, as it announced that weak demand in Europe dragged its 2011 sales down by 1.5 percent.
"We don't exclude the possibility of accelerating what we're doing through a broader alliance," said Frederic Saint-Geours, the head of the group's Peugeot and Citroen brands.
He said no talks were currently under way with any group and that any future alliance would have to be coherent with Peugeot Citroen's strategy, must create real synergies and must not jeopardize the firm's independence.
"We are quite open provided these conditions are met," Saint-Geours said.
Fiat chief executive Sergio Marchionne said this week at the Detroit Auto Show that his firm was open to the idea of bulking up with another volume carmaker to create economies of scale.
Marchionne met Peugeot Citroen chief executive Philippe Varin on the sidelines of the show and some observers took this as being a possible prelude to a link-up between the two companies.
PSA, Europe's second-largest carmaker, meanwhile said in a statement Thursday that it sold 3.5 million vehicles last year, a decline of 1.5 percent due to lower demand for cars in Europe.
The company's sales in Europe fell 6.1 percent, mainly due to weaker sales in the sub-compact segment, while they rose 11 percent in Latin America, 7.7 percent in China and 35 percent in Russia, it said.
The carmaker, which employs over 205,000 people around the world, including 100,000 in France, said it expects overall sales in Europe will fall again in 2012.
But it said it expects sales to keep on growing in Latin America, China and Russia in 2012.
In October, PSA Peugeot Citroen announced an 800-million-euro cost-cutting plan for 2012 that is expected to include lay-offs due to the stagnating European car market.