PSA, the parent company of Peugeot and Citroen, has confirmed it has entered into talks about taking a share in Mitsubishi.

A PSA statement revealed that it has started discussions 'to study jointly possible ways to enlarge our relations, which could go as far as a strategic partnership'.

The three companies already have co-operation agreements: Peugeot and Citroen sell rebaged versions of the Mitsubishi Outlander (the 4007 and C-Crosser respectively) and have just announced they will sell electric versions of the Mitsubishi i-Miev badged as the iOn and C-Zero respectively.

According to Japanese news agency reports, PSA could take a share of up to 50% in Mitsubishi. If the partnership was sealed it would create the world's sixth largest vehicle manufacturer with combined sales of around 4.5 million units (based on 2008 volumes).