Fiat seems bent on world domination of the car industry. But these days that cannot be achieved without a production presence in China, which has suddenly found itself catapulted into the position of the world's largest vehicle market by the blood bath in the US car market.

So now comes news that the Italian car company is talking to one of Beijing's favourite Chinese carmakers, Guangzhou Automobile, about a production joint venture. This would get Fiat back into China, after the joint venture with Nanjing Auto fell apart in 2007.

Fiat is not talking about its plans for China, the only current bright spot in the world car industry. But Guangzhou Auto yesterday confirmed to the Financial Times that it is talking to Fiat about technical co-operation that “would not exclude the possibility of forming a joint venture”. The outlines of a potential deal are there for all to see on the website of the Chinese Ministry of Environmental Protection, which posted a notice in March that Fiat and Guangzhou Auto are discussing a Rmb4.27bn ($626m) joint venture. The official Shanghai Securities News says the venture could be approved within weeks and would produce 140,000 vehicles and 220,000 engines annually from 2011.