Trading in Fiat shares was suspended for more than half an hour after they slumped by 5.13 percent at the opening of the stock market. At 0950 GMT, Fiat's share price was down by 4.32 percent at 3.54 euros, while the FTSE Mib index on which they trade was flat overall.

The company was hit by a report in Il Messaggero newspaper which said that Fiat was in talks with four banks -- UniCredit, Morgan Stanley, Bank of America and Goldman Sachs -- on a possible capital increase worth between one and two billion euros ($1.3 to $2.6 billion) in 2013.

Fiat already owns 58.5 percent of Chrysler and the funds would go to buying the rest of the company, the report said.

The Italian carmaker saved Chrysler from bankruptcy in 2008 and is now hoping that its US partner will return the favour, raising enough funds through sales in North America to balance losses that Fiat is suffering in Europe.