Marchionne has turned his attention to Germany after being rejected by FCA's top merger candidate, General Motors.

Fiat Chrysler Automobiles chief executive Sergio Marchionne has turned his attention to Germany after failing to engage General Motors in merger talks.

Marchionne recently predicted that PSA Group's purchase of General Motors' Opel division will naturally arouse Volkswagen's interest in a possible tie-up with FCA, as the bigger Opel-PSA entity "threatens VW most" by "creating a number-two on its heels," according to Bloomberg quotes from Geneva.

VW CEO Matthias Mueller has flatly dismissed the proposition, telling Reuters "we have other problems." The executive says he hasn't seen Marchionne "for months" and VW is "not ready for talks about anything."

Notably, VW is still working to put the diesel emissions scandal in its rearview mirror as FCA has become embroiled in a similar situation. The latter automaker recently warned investors that it could be on the hook for up to $4.6 billion in penalties if its dispute with the EPA and California Air Resources Board ends unfavorably.

Marchionne spent several years trying to convince GM and Wall Street that a merger would be beneficial for both companies, potentially saving around $6 billion in overlap costs annually. Critics argue that such numbers are more difficult to achieve in practice, however.