Daimler still wants to sell its almost one fifth stake in Chrysler, a spokesman for the German company was quoted as saying on Tuesday, ahead of confirmation Fiat would join forces with the US automaker.

"We are still trying to divest our 19.9% stake in Chrysler," the spokesman told Reuters, declining to discuss to whom it wanted to sell the holding.

It has been in talks with private equity group Cerberus Capital Management, which bought the rest of Chrysler in 2007, the report said.

The spokesman declined to comment on prospects for a combination of Fiat and Chrysler but said: "We welcome any initiative that serves to stabilise the situation at Chrysler and preserve jobs at the company."

Daimler had not ruled out the idea of seeking German state guarantees for its finance arm, he added, noting the company did not want to be at a competitive disadvantage should rivals make use of the programme for their financing operations.

Volkswagen has already applied for such guarantees and BMW has said it is considering the idea, Reuters said.