As talks with General Motors do not seem to be leading to a concrete alliance, the Renault – Nissan combine may consider talks with Ford Motor. Talks between GM and Renault - Nissan were initiated in July this year and both sides would decide by mid-October whether to form an alliance or drop such plans.

Carlos Ghosn, who heads both Renault and Nissan, indicated yesterday that the combine would continue to seek a North American partner if talks with GM fail. Ford is the only possible partner as Daimler Chrysler, the other major player in North America, would not be keen on such an alliance. Ghosn was talking to the media after his meeting with GM CEO Rick Wagoner at the Paris Motor Show.

Ford chairman William Ford Jr reportedly called Ghosn in July to indicate Ford's interest in a partnership, if talks with GM failed. There have also been media reports about the two sides holding informal talks regarding a possible alliance.

General Motors is reportedly sceptical of the benefits of an alliance as projected by Renault – Nissan. GM has had many such alliances across the globe with other auto companies and the results were not very satisfactory. Last year, GM had to end such an alliance with Fiat at a considerable financial cost.

Renault – Nissan is apparently very keen on both sides taking strategic stakes in each other to deepen the proposed alliance. This is in line with their own holding structure, where Renault holds a 44 per cent stake in Nissan which in turn holds a 15 per cent stake in the French company.

However, GM is reportedly keener on cooperation in specific product lines as it is not in a position to make financial investments. In fact, The Wall Street Journal had reported this week that GM was demanding a sizeable amount from Renault – Nissan as GM believes it would bring more value to a possible alliance.

While GM and Ford are in deep trouble and have announced major restructuring exercises involving plant shutdowns and layoffs, the performance of Renault and Nissan have also slipped recently.

Ghosn is very keen on a major alliance to broaden the product line-up and reduce costs by sharing development costs, sales networks and vehicle platforms. However, some investors and analysts are questioning the feasibility of such an alliance as it would be too large to manage.