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FIAT has been scouting for a partner and recently was looking at Suzuki and Mazda as potential partners. Now the Italian automaker is also looking at Volvo as a potential partner. Sergio Marchionne, CEO of FIAT feels that a partnership is vital for long term survival. Volvo’s CEO Stegan Jacoby has also openly admitted the need for a partnership with the Chinese owned company looking to collaborate for sharing of platforms, engine and lower development costs. Geely (the current owners of Volvo) bought the Swedish brand from Ford but has no tie-up with the latter for supply of engines. The company has now developed its own range of 4-cylinder engines.

“There’s still lots of unexplored technology with combustion. Future drivetrains need to be cheaper and more cost effective. You just won’t sell any cars at that price in the B-segment. I don’t want to trial a load of future solutions. We will take the benefits of others’ work,” Sergio Marchionne, CEO, FIAT, said.

What FIAT wants to do is to concentrate on internal combustion engine, rather than investing heavily in developing alternate fuel technology (electric, hybrids, etc). The Italian automaker will be launching an electric version of the Fiat 500 by the end of 2012, but has not spent on the development of the electric powertrain. The company has instead borrowed technology from other companies, saving them crucial development costs. By partnering with FIAT, Volvo will gain access to their fantastic line-up of FIRE and Multijet engines, while FIAT will benefit from the safety technology found in Volvo cars.

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via Autocar UK