Fiat Chrysler and Renault are in discussions to form a partnership, a source familiar with the talks told CNBC.
The Italian-American and French automakers are looking at a number of opportunities that would have the companies working together in the future, the source said.
It is unclear if a partnership between the two automakers would lead to Fiat Chrysler eventually joining the Nissan-Renault-Mitsubishi alliance.
Fiat Chrysler and Renault both declined CNBC's request for comment.
The Financial Times first reported the story.
Back in March, The Financial Times reported that Renault planned to take up merger talks with Nissan within the year, and then potentially acquire Fiat Chrysler.
Fiat Chrysler's chief executive, Mike Manley, previously told the FT: "If there's a partnership, merger, relationship that makes us stronger, then I'm absolutely open to looking at it."
If Fiat Chrysler is added to the Renault-Nissan-Mitsubishi Alliance, which dates back to 1999, it would become the largest global carmaker, with 15.6 million combined sales a year. The current leader, Volkswagen, sold 10.8 million last year.