The logos of automobile companies (LtoR) Abarth, Lancia, Fiat, Alfa Romeo and Jeep are pictured at the entrance to the Fiat Chrysler Automobiles (FCA) at the Fiat Mirafiori car plant on May 27, 2019 in Turin, northern Italy. - French and Italian-US auto giants Renault and Fiat Chrysler are set to announce talks on an alliance, with a view to a potential merger, informed sources said on May 26, 2019. (Photo by MARCO BERTORELLO / AFP)        (Photo credit should read MARCO BERTORELLO/AFP/Getty Images)
The logos of automobile companies (LtoR) Abarth, Lancia, Fiat, Alfa Romeo and Jeep are pictured at the entrance to the Fiat Chrysler Automobiles (FCA) at the Fiat Mirafiori car plant on May 27, 2019 in Turin, northern Italy. - French and Italian-US auto giants Renault and Fiat Chrysler are set to announce talks on an alliance, with a view to a potential merger, informed sources said on May 26, 2019. (Photo by MARCO BERTORELLO / AFP) (Photo credit should read MARCO BERTORELLO/AFP/Getty Images)
PHOTO: MARCO BERTORELLO/AFP/Getty Images
Now playing
02:48
Fiat blames France for Renault merger collapse
PHOTO: Natalia V. Osipova
Now playing
02:28
Review: The Ghost is more modest and simple, but it's still a Rolls-Royce
PHOTO: BMW
Now playing
03:04
This Mini Cooper is built to race. No, really
The 2021 Jeep® Wrangler Rubicon 392
The 2021 Jeep® Wrangler Rubicon 392
PHOTO: FCA US LLC
Now playing
01:11
See Jeep's most powerful Wrangler ever
PHOTO: Volkswagen
Now playing
00:50
See the Golf R, VW's most powerful Golf ever
PHOTO: JAMES LIPMAN/ SSC North America
Now playing
01:32
Watch this production car break world speed record
PHOTO: Peter Valdes-Dapena/CNN
Now playing
01:01
This is Volkswagen's first electric SUV
PHOTO: Ferrari
Now playing
01:39
Ride along in the latest Ferrari convertible
Nissan Z concept car.
Nissan Z concept car.
PHOTO: Nissan
Now playing
00:54
Nissan gives a glimpse of its first Z car in more than a decade
Now playing
01:06
This new electric car has over 1,000 horsepower
PHOTO: Daniele Iannoccari/Maserati
Now playing
00:51
See Maserati's first supercar in over a decade
Now playing
01:45
This $1.7M RV lets you go off the grid
PHOTO: FCA US LLC
Now playing
01:33
Jeep is reviving a classic. See the new Grand Wagoneer
2021 Ram 1500 TRX front 3/4.
2021 Ram 1500 TRX front 3/4.
PHOTO: FCA US LLC
Now playing
00:57
See Ram's 702hp pickup that's taking on the Ford Raptor
PHOTO: General Motors
Now playing
01:00
Check out Lyriq, the first fully-electric Cadillac
Now playing
01:28
You can't drive this new Lamborghini supercar down your street
(CNN Business) —  

Fiat Chrysler is once again looking to get hitched.

The Italian-American automaker is in talks with French automaker PSA Group, the owner of Peugeot and Citroen cars, over a potential combination.

The carmakers confirmed in statements Wednesday that they are taking part in “ongoing discussions” over a potential deal. The talks were first reported by the Wall Street Journal.

A deal would create a $50 billion company, although the Journal reported that talks are fluid and there is no guarantee that an agreement will be reached.

Investors like the idea. Fiat Chrysler shares jumped 9% in early trading in Milan, while PSA Group’s stock shot up nearly 6% in Paris.

Global automakers are facing a period of declining sales, because of a slowdown in China, the largest market for new car sales. Chinese sales dropped about 11% in the most recent period, because of a weakening economy exacerbated by trade tensions with the United States.

Automakers are also facing pressure to develop expensive electric- and self-driving vehicles, a research and development effort that will cost billions of dollars but may not produce profits for years. Fiat Chrysler is trailing many of its competitors in those R&D efforts.

Fiat Chrysler was created out of a cross-border merger. Fiat started its purchase of Chrysler out of bankruptcy 10 years ago, a deal that was completed five years later. But the combined automaker is significantly smaller than many of its rivals, putting it at a disadvantage in purchasing muscle as well as spreading out the cost of research and development over a larger number of vehicles. It has been looking for another deal to give it the heft it needs to be competitive.

Sergio Marchionne, the late CEO who brought the two companies together, was very public about his desire for a deal with General Motors, although he was rebuffed. He also talked publicly about his interest in a combination with a tech company looking at getting into autos, such as Google (GOOG) or Apple (AAPL).

In May, Fiat Chrysler (FCAU) made a merger proposal to another French automaker, Renault, in a deal that by some measures would have created an automaker larger than GM. But it quickly withdrew the offer, saying that “it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully.”

The French government owns 15% of Renault and is its largest shareholder; it also owns 12.2% of PSA. France has said it would approve the deal only if there were protections for French jobs and factories.

PSA has been involved in mergers as a way of bulking up as well. In 2017 it agreed to pay $2.3 billion to buy GM (GM)’s European business, adding the Opel and Vauxhall brands as GM (GM) exited the continent. GM (GM) lost about $22.4 billion in Europe over the 17 years before the deal, but Opel and Vauxhall are now profitable for PSA.

Fiat Chrysler, which is due to report third quarter results on Thursday, is likewise profitable. It recently agreed to pay a $40 million fine to the US Securities and Exchange Commission for deceiving investors by lying about its US sales.

– Chris Liakos contributed to this report