Sergio Marchionne, the chief executive of both Fiat and its majority-owned Chrysler Group unit, said he saw a 50% chance that Chrysler would go public but would prefer that it be fully merged with Fiat.

Fiat shares ownership with a retiree trust fund affiliated with the United Auto Workers labor union. Marchionne told Reuters he would prefer that Fiat buy the trust fund's holdings.

"My preference is to be one single company," Marchionne said in Kokomo, Indiana, as Chrysler announced new spending on transmission plants in the area.

Over the last four years, the two automakers have been blending their operations as Fiat has increased its stake in Chrysler, said Marchionne, who has been CEO of both companies since Chrysler emerged from bankruptcy in 2009.

Fiat, however, has been odds with the trust fund over Chrysler's worth. The fund is under pressure to squeeze as much value as possible from its Chrysler holding to pay for medical benefits, Reuters noted.