Nissan has declined to confirm or deny a report in a Detroit paper that it was poised to take a 20% stake in Chrysler. And a senior Chrysler executive has suggested the automaker's cash pile is making it attractive to suitors.

"This is more of the same noise and we have no comment to make on any of the recent speculations," the automaker's chief spokesman, Simon Sproule, told Reuters.

Meanwhile GM, looking for sources of cash as it burns through an estimated US$1bn, has also been continuing talks to acquire Chrysler, people briefed on the talks told Reuters. Private equity owner Cerberus has said the automaker ended June with $11.7bn in cash.

Nissan CEO Carlos Ghosn is understood to believe a three way alliance between Renault, Nissan and Chrysler would benefit all three with cost savings similar to those achieved through the current Japanese-French automakers' alliance, in place since 1999 and said to have saved each company millions in development costs. Nissan and Renault sell markedly different cars but share platforms and engines.

But investors, who balked at three-way talks with GM two years ago, are likely to react similarly this time, according to Reuters.

"It's hard to see the benefit when the global auto market is slowing down," Takeshi Osawa, senior fund manager at Norinchukin Zenkyoren Asset Management told the news agency. "I'm not sure Nissan can afford to make such a move. It's likely to be negative on its shares," he added.

A separate report, citing a person briefed on the discussions, said Chrysler could be broken up as Cerberus tried to get out of the auto business, and many combinations are being discussed.

Meanwhile, Bloomberg News, citing "two people with knowledge of the matter" reported that Nissan Motor isn't willing to put up cash for an alliance with Chrysler.

Though Nissan is sitting on $4.6billion in cash, it won't consider a deal that would weaken its financial position, the report said.

In another development Chrysler vice chairman and president Jim Press - making a first public appearance by a Chrysler executive since all the speculation broke - last night dismissed reports that Cerberus is touting Chrysler around other automakers for sale as just speculation. He was reported to have said at an electronics engineering conference - in GM's headquarters building - that he had confidence in his company and that Chrysler would "be here".

"There's not a lot of reason to talk about mergers and things like that because it's all speculation. We've been doing fine," he said on the sidelines of the event.

Press said Chrysler had downsized to match demand, and improved its cash position.

He suggested the automaker's steadier company cash flow might be a reason for potential buyers to be eyeing its assets but declined to answer questions from Reuters about merger talks with General Motors.

He told the news agency the US auto industry risks being distracted by speculation about consolidation and the financial market problems.

Though he would not provide numbers, he said cash flow had stabilised despite a 25% drop in its US vehicle sales to the end of September.

"We have been able to stop the high level of negative cash flow and have been able to stabilise it, maybe that is one of the reasons a lot of people have been smelling around the Chrysler vault lately, I don't know," Press told Reuters.

He told reporters the company was proceeding with its Phoenix project to develop more fuel-efficient V6 engines - the $3bn project was announced last year about the time Cerberus bought the automaker.

There had been speculation the project would be put on hold while talks with GM continued.

Auto market intelligence
from just-auto

• Auto component fitment forecasts
• OEM & tier 1 profiles & factory finder
• Analysis of 30+ auto technologies & more