Turin, Italy – Fiat Group is negotiating with Chrysler LLC to form a strategic partnership, according to Automotive News. A business deal could include an equity stake by the Italian company in the Chrysler and give the U.S. automaker access to small and midsize car platforms, along with engines and transmissions.

Chrysler already has an agreement with Nissan for the Japanese-based company to produce a small car based on the Hornet concept, to be launched in 2010.

In a statement, Chrysler said that “talks are going on between companies in all industries” and that “ours is no different”, but said that the company does not confirm or disclose the nature of its private business meetings as a matter of policy.

Fiat had planned to relaunch its Alfa Romeo brand in North America but had difficulty finding a local manufacturing and distribution infrastructure. The company also said it would like to sell the Fiat 500 minicar in the U.S., but only if it is built locally. A deal with Chrysler would give the Italian company access to an established North American dealership structure and to local assembly plants.

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