With Opel lost to Magna, there is speculation Fiat will eye PSA/Peugeot-Citroen but a deal would be full of complications, according to analysts.

"[Fiat CEO Sergio] Marchionne's expansion strategy is risky and Chrysler is the weakest part," Metzler Equities' analyst Juergen Pieper told Reuters. "The whole thing including Opel would have made some sense. If the Opel bid fails the whole thing is too weak and too risky."

Marchionne on Friday said the deal with Chrysler was its main focus, and ruled out teaming up with Magna. Even without Opel, life would "go on", he insisted.

Replacing Opel with PSA would create Europe's biggest car maker and boost Fiat well over the 5m units of yearly output Marchionne has said he wants.

"You would probably get to run to about 7m units. The scale argument would be even stronger in a Peugeot tie-up in whatever form versus a GM Europe (tie-up)," Arndt Ellinghorst, an analyst with Credit Suisse, told Reuters.

"Peugeot has a similar problem, lack of scale in the market."

Eric-Alain Michelis, analyst at SG Securities, told the news agency a PSA alliance made sense since it and Fiat had ties through a 20 year old cooperation deal for light commercial vehicles.

A Fiat merger could broaden Peugeot's market internationally as well as joining forces in the high-end premium market with such brands as Fiat's Alfa Romeo and Lancia, he said.

"It makes sense. Some people are saying (Fiat's effort with) Opel is a type of smokescreen to attract media attention so they can negotiate behind the scenes with Peugeot," Michelis said.

But PSA has already said it wants to remain on its own and if Fiat were to try for a deal with the French carmaker, analysts said it would face having to pay out money it does not have.

Other obstacles would be family politics, possible protectionism in both France and Italy and union opposition to any cost cuts.

Nomura analyst Michael Tyndall told Reuters Fiat had limited options outside Opel, noting past speculation about talks between Fiat and PSA as well as with Germany's BMW and Daimler.

"I think we can safely assume that none of those talks were productive. So we're left scratching our heads. Where would they find the scale?" he asked.

GM's Swedish unit Saab and Ford's Volvo are too small to make much impact on volumes, analysts told the news agency. However, Marchionne said on Friday Fiat was interested in seeking a deal with Saab if its Opel bid failed.

Fiat also has a joint venture with Tata Motors but the Indian company is too far away and its products too different to provide cost savings for Fiat.

With more than 100 car brands in China, a company there might be buyable, Metzler's Pieper said, noting any deal there would be small in comparison with Opel.

Nomura's Tyndall said neither Fiat nor PSA had the money to carry out a restructuring and the Italian and French governments would likely become involved in a merger.

"I don't think the French government, having loaned EUR3bn to Peugeot, would be interested in providing money that would potentially see French jobs go," he told Reuters.