Chrysler is reported to be talking with Fiat over leasing spare production capacity to the Italian automaker and sharing retail distribution.

This would allow Fiat to return to the US after a 25-year absence, people briefed on the talks told Reuters.

News agency sources also said Chrysler had talked with Tata Motors about selling the Jeep Wrangler SUV in India and possibly other Asian markets.

Chrysler and Tata spokesmen would not comment on the report.

Reuters noted that Fiat CEO Sergio Marchionne has said Fiat is looking for a partner for its return to the North American market.

An anonymous investment banker told the news agency it was likely that a product-based tie-up between Tata and Chrysler could lead to a larger deal over time.

"You could definitely see this evolve into something," the banker said. "It would make sense for Tata to buy Jeep if this partnership went through ... and Chrysler could really do with selling a brand and getting some cash."

Tata and Chrysler are already cooperating on developing an electric vehicle - the Indian automaker said last January that "exploratory discussions" had begun with Chrysler over sales for a battery-powered version of its Ace mini-truck.

Chrysler is continuing those talks after reaching a memorandum of understanding for the negotiations, a person familiar with the automaker's plans told Reuters.