The future of Fiat has taken another twist today with comments reportedly from CEO Sergio Marchionne that a merger with the Chrysler Group could happen with "the next two or three years" and that the new entity could be headquartered in the U.S., a move that would end 111 years of Turin being the seat and beating heart of the Italian carmaker.

However his comments, made during a JD Power conference in San Francisco, are open to interpretation and could signal a double-headquarters scenario, although this is actually the case at the moment. It is one of many "scenarios and alternatives" to consider in the short term future, the Italian newspaper Corriere della Sera reported Marchionne telling the JD Power audience. "In the next two or three years we could look to a new entity; it may have the base here," he added.

Marchionne's comments which were quoted by Corriere della Sera today, prompted the mayor of Turin, according to the AFP news agency, to demand "immediate clarification." Sergio Chiamparino told AFP: "It's clear that an international group can have several offices but it would be different if the headquarters were in the United States."

The hard hitting comments are the latest in a series from Marchionne who has been bullish in pressing for the introduction of new working practices across Fiat's Italian network; in recent months he has both threatened to quit Italy and said that Fiat would be profitable without its Italian operations.

Founded on July 11, 1899, by a group of investors that included Giovanni Agnelli, Fiat S.p.A. ("Fabbrica Italiana Automobili Torino") went on to shape and define the industrial rise of the Italian nation. Giovanni's grandson Gianni (Chairman from 1966 to 1996) moulded the fabric of the modern day empire, building everything from cars and trucks to aircraft and tanks. After decades of discussion over splitting up the Italian carmaker, a prospect that was never countenanced by Gianni Agnelli, the scenario finally played out last month: the Fiat Group was split into two separate entities, Fiat Spa and Fiat Industrial. Fiat SpA includes the car brands of Alfa Romeo, Abarth, Fiat, Ferrari, Lancia and Maserati, as well as Fiat Professional (light commercial vehicles) along with the bulk of Fiat Powertrain Technologies (FPT) that is responsible for cars and commercial vehicles, and the automotive component and industrial companies Magneti Marelli, Teksid and Comau. Meanwhile, Fiat Industrial contains CNH (which includes the Case, New Holland, Steyr and Kobelco brands), Iveco commercial vehicles (which include Iveco, Iveco Magirus, Iveco Astra and Iveco Irisbus brands) and the Industrial and Marine division of FPT.

Splitting the company up has unlocked shareholder value but, while Fiat Industrial is expected to be picked off in due course with a number of heavyweight suitors thought to be circling its assets, Fiat is left somewhat exposed without the financial lifeline it has been traditionally thrown in the past by the more profitable components of the group.

In the JD Power speech itself Marchionne, made no reference to a possible future Fiat-Chrysler merger, instead he focused in part on the strengths that he perceives that the two carmakers can offer each other. "Another part of the answer to Chrysler’s progress is certainly the partnership with Fiat," Marchionne told the audience in San Francisco. "Chrysler and Fiat now share a common challenge to merge their respective strengths and capabilities in order to overcome the lingering effects of the crisis and create a future together as a global leader in the auto sector. Everyone knows that Chrysler and Fiat are two very different companies. They each have their own unique history and represent two worlds, two cultures, two distinct fonts of experience and know-how.

But it is exactly the differences between two companies that constitute the strength of the partnership, because the two groups are perfectly complementary in terms of products, architectures, know-how and geographic presence," Marchionne, who is the CEO of both Fiat and Chrysler, continued. "The alliance is leveraging core competencies on both sides, with a clear definition of responsibilities to enable the two groups to maximize cost efficiencies in development, engineering and manufacturing. The presence and experience of Fiat in the smaller car segments and of Chrysler Group in the medium and larger segments translate into a full product offering and the ability to compete across all market segments. Both Fiat and Chrysler Group will benefit from each other’s core powertrain strengths. Fiat is recognized for its technological know-how and commitment to sustainable mobility, as well as its ability to bring fuel-efficient powertrain technologies, including diesel and CNG, to the United States. Chrysler Group brings to the partnership its experience in hybrid and electric engine technologies, and will introduce its first fully electric car, a version of the Fiat 500, in 2012.

"We will begin selling a gas-electric hybrid version of our Chrysler 300 sedan next year and later will bring hybrid technology to our next-generation minivan," claimed Marchionne. "We are also sharing best practices in several areas, such as application of Fiat’s World Class Manufacturing program to all Chrysler plants, a key to improving safety, quality and efficiency in our facilities.

On the distribution side, the alliance provides Fiat access to the North American market," said Marchionne. "The first tangible result is the introduction of the Fiat 500, the Cinquecento, marking the brand’s return to North America after an absence of 27 years. The 500 will soon be rolling into the 130 dealers that will represent the Fiat brand in the United States. As for Chrysler, we are now in the process of finalizing agreements to distribute Chrysler products through the Fiat dealer network in both the European Union and Latin America. All of this is in addition to the work we are doing to strengthen the domestic network."