As Fiat Chrysler Automobiles (FCA) starts its life as a public company traded on a U.S. market, the engineer of the merger that created the company, CEO Sergio Marchionne, speculated that the world’s largest car companies of the future would be created by mergers and acquisitions. “There is room to create one guy which will be bigger,” he told Bloomberg, referring to market leader Toyota Motor Corp. (NYSE: TM). Too much capacity still plagues the industry, in a world in which that problem contributed to the bankruptcies of General Motors Co. (NYSE: GM) and Chrysler.

There are several business combinations that could create an undisputed market leader. The biggest of these would be a merger of Toyota and GM, two of the three largest car companies in the world. Such a deal would face scrutiny from regulators. But the market share of the two manufacturers would be less than 30% in America, and much less than that in Europe. China is as competitive a market as either, so a merger would not create an unusually large company there.

Toyota’s chance to buy GM is bolstered by its market cap of $180 billion, compared to GM’s $46 billion. Wall Street has gotten weary of GM’s disaster in Europe, its stagnant market share in the United States and endless recalls. GM can claim it has a pole position in China, but that is about all it can claim as an unqualified success. And GM has made itself easier to take over as its stock trades just above a 52-week low.

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The cost savings of a Toyota buyout of GM would be considerable. Each has large dealerships around the world and tremendous manufacturing operations. The savings of a transaction would stretch into the billions of dollars.

In a world in which $50 billion deals have become entirely possible because of the availability of capital and stock prices that have fueled market caps that some companies have never reached before, larger and larger deals are possible.

Marchionne may be correct. A deal to create a clear number one car manufacturer in the world is entirely possible.

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