TrueCar's John Krafcik today suggested that a merger between VW and Fiat Chrysler would produce a "well-balanced" and "highly profitable" carmaker.

A new analysis from TrueCar suggests that Fiat Chrysler and Volkswagen are a natural fit for each other, if they were to partner up.

TrueCar President John Krafcik said during an appearance at the Automotive Press Association in Detroit today that if the two companies were to merge, it would be “well-balanced” and “highly profitable.”

“This is an absolutely brilliant combination,” Krafcik said. “For sure, these two companies have a natural attraction to each other.”

TrueCar, the vehicle pricing service that now guides roughly 4% of the new vehicle purchases in the U.S., has developed a model for looking at the product portfolios of the major carmakers that looks more closely at the revenue and revenue potential of four key super segments: cars, utilities, pickups and premium.

What True Car found was that Fiat Chrysler with its strength in utilities and pickups in the U.S. market actually complements the Volkswagen group’s holding is the U.S. where VW has a foothold in the passenger car segment and in the premium car segment thanks to Porsche and Audi, precisely the segments where FCA is the weakest.

Krafcik’s notion of blending VW and FCA undoubtedly will cause many Chrysler employees to shudder since they have never quite recovered from the disastrous 1998 marriage with another German carmaker, Daimler, which was inspired by similar notions, but failed miserably.

Krafcik, who until last December headed up Hyundai Motors America and held key positions at the Ford Motor Co. before spending a decade with Hyundai, said he wasn’t predicting any kind of marriage of VW and FCA, but was simply pointing out the importance of looking at revenue and revenue potential of various segments in analyzing trends across a dynamic industry.

“For individual automakers the revenue mix across the four super segments varies considerably,” Krafcik noted. “Some are overly reliant on mass-market cars — notably Volkswagen Group and Hyundai-Kia — while others are significantly overweighted in pickup and utility segments, such as Fiat Chrysler.”

No automaker has a revenue mix even close to the consumer-driven industry mix, he said, although Toyota, thanks to its global perspective and faith in long-range planning, comes close.

In addition, the 25% “Chicken Tax,” which places a hefty tariff on pickup trucks exported to the U.S. from foreign countries, has limited investment and innovation in the pickup truck segment, which has sprung back to life in the wake of the recession. Pickup trucks have become even more profitable since the average transaction price for new pickup is now roughly $40,000.

(New vehicle buyers gobble up trucks, SUVs, luxury cars. For more, Click Here.)

Nevertheless, Krafcik said the True Car analyst put a spotlight on some key trends.

• From 2009 to 2014, total U.S. auto industry revenue growth of at least 79% is outpacing the 58% unit growth forecast for the same period.
• That trend should continue into 2015 as economic growth continues and the price of fuel remains relatively stable.
• Looking solely at industry volumes without factoring in the richer margins and revenue generated by three of the four vehicle segments masks how truly robust the industry is.
• During the 2009 to 2014 period, pickups and mass-market utilities, which deliver higher transaction prices and margins than mass-market cars, increased their share of industry revenue to 50% from 44%.
• Industry trends point to stabilization in revenue mix, though not unit mix, composed of 30% mass-market cars, 30% utility, 20% pickup trucks and 20% premium vehicles.

Carmakers do have an opportunity to broaden their portfolios.

Mergers and acquisitions could also be used to create more revenue-balanced OEM groups, which makes the potential for an FCA- VW merger so intriguing, he said.

(Click Here for details about Ford’s recall of more than 200,000 vehicles.)

In fact, VW and FCA were reported to have held exploratory talks of sorts as recently as last year but nothing ever came of the discussions. Both companies denied the discussions took place.

Krafcik noted that TrueCar’s revenue and segment forecast comes follows predictions by some that auto demand has nearly reached a volume peak.

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In comparing the auto industry to other industries, Krafcik noted that the automotive industry typically is focused on counting units as a growth measure when it should be focusing on total revenue. In transaction revenue terms, autos should generate $521.5 billion this year compared with $292 billion in 2009, based on TrueCar data.

While some analysts have expressed concern this year over the longer terms used to finance vehicles and the broader use of subprime financing, Krafcik said the growth of the new car sales has tracked the U.S. economic expansion since the recession.