The head of Italian carmaker Fiat SpA, which is in the process of acquiring US automaker Chrysler, is reportedly continuing talks with German officials about a possible takeover of GM's Opel unit.

According to reports in the Sueddeutesche Zeitung newspaper and Focus magazine which cited unidentified sources, Fiat CEO Sergio Marchionne is expected to meet German economy minister Kar-Theodor zu Guttenberg and foreign minister Frank-Walter Steinmeier to present a concept for the take over of Opel.

The German government did not confirm the reports.

There was no immediate confirmation from the German government.

GM's restructuring for which it is seeking billions of dollars in government aid from the US administration is believed to include finding investors for its non-core and non-profitable assets.

Meanwhile, Opel has said that it needs euro3.3 billion to see it through the economic crisis, while the German government has said it does not foresee giving direct state aid. Chancellor Angela Merkel has suggested the government could arrange loan guarantees for an Opel investor.

Several suitors have reportedly evinced interest, including Fiat and Canadian car parts maker Magna International Inc which has already presented Guttener with a concept for commitment with Opel.

The German government has decided to wait till the US government finalises its plans for GM.

Meanwhile, Fiat has proceeded with the takeover of Chrysler with the US automakers' attorneys saying the company would announce plans to sell substantially all of its assets to the Italian automaker.

The alliance between Chrysler and Fiat would allow the Italian automaker take a 20 per cent stake in Chrysler. Chrysler will gain access to Fiat's  small vehicle and fuel-efficient technology. The deal will be another feather in chief executive Sergio Marchionne's cap and will further enhance his reputation as a corporate Midas.

Fiat will gain access to US market through Chrysler dealers for virtually next to nothing. For at least a year, Marchionne had been scouting for a partner to gain entry to the American market and had approached GM, Ford, BMW and Nissan along the way. A plan to re-introduce Alfa Romeo had to be dropped following last year's economic distress.

According to Marchionne, Fiat is too small to be able to hold its own in an era of consolidation. The company would need to sell 5.5 million or more vehicles to remain viable (Fiat sold 2.1 million vehicles last year) and that kind of volume would be possible only if Fiat were to sell cars in the US.

There is also an immediate benefit in the $8 billion government loads to help in the reorganisation of Chrysler.

Over the longer haul, Chrysler gets and opportunity to roll out Fiat products under the Chrysler tag, for instance, a Chrysler version of the Bravo sedan.

Analysts point out that the deal might not be quite as good for Chrysler. They perceive a significant risk in American customers giving a thumbs down to the Italian products that are generally small and stylish which US customers do not prefer.

Another risk factor concerns the adaptability of Fiat products to US emissions and safety standards. Additionally there remains the question of how fast and at what cost Chrysler would be able to retool what is left of its 30 assemble plants in North America.

The price of gasoline is also a major variable as the interest of the American consumer in fuel efficient cars bears a directly proportional relationship with the cost of gasoline. As soon as fuel costs go down, the interest in fuel efficient cars flags.