Media reports this week claim that struggling American carmaker Chrysler LLC is in talks with both Tata Motors and Fiat Group in a wide ranging number of areas.

Media reports this week claim that struggling American carmaker Chrysler LLC is in talks with both Tata Motors and Fiat Group in a wide ranging number of areas.

Chrysler LLC, the third largest US carmaker, has been rapidly losing market share and is anxious to stem its outward flow of cash. An 80.1 pct stake in Chrysler was bought by private equity firm Cerebus Capital Management in May last year, when DaimlerChrysler split the American and German operations apart. However Cerebus has subsequently struggled to put any plan to turnaround the losses into action or take takes steps to move Chrysler forward, and it has been hit by the subsequent economic downturn. Chrysler lost US$1.6 billion in 2007 and US$509 million during the first quarter of this year.

Fiat Group has made no secret that it has been talking to Chrysler, as well as its Detroit-based rivals, General Motors and Ford, as the Italian firm looks to launch its automotive brands in the US, starting with the sporty Alfa Romeo unit. Fiat CEO Sergio Marchionne is also considering a manufacturing future for the Car of the Year award winning Fiat 500 in North America. While it is well know that Marchionne is interested in leasing factory capacity from one of the "Big Three" to produce Fiat Group Automobiles' models stateside, the new reports this week suggest that the talks with Chrysler could extend to assistance from its distribution and retail network. Fiat is already in discussions with BMW over using the US Mini dealer network to sell the new Alfa MiTo model.

At the same time Chrysler is talking to Fiat's close joint venture partner Tata Motors about the Indian based carmaker distributing its key brands in Asia. The focus of these talks appear to centre round the Jeep unit, potentially the strongest brand within the Chrysler stable, and in particular its best-selling model, the Jeep Wrangler. The Jeep brand has ridden out most of this year's sharp downturn and the main models in the range have also been refreshed recently; a military version is also available, which could be of interest to Middle Eastern and Asian armed forces through Tata. Meanwhile, in January Chrysler entered into the initial stages of a deal that would see it importing fully assembled versions of Tata's electrically-powered Ace mini-truck. Chrysler's GEM (Global Electric Motors) division has already successfully guided the battery operated Ace through US homologation trials and the eventual target is to import 50,000 units annually.