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A German magazine has reported that Volkswagen and Fiat Chrysler are in discussions with regards to a possible merger, but the automakers have denied that such talks are taking place.

The publication, Manager Magazin, said that VW chairman Ferdinand Piech has held talks with members and associates of the Agnelli company, which through its holding firm Exor controls a 30% stake in the Fiat Chrysler alliance.

Aside from the Fiat brand, the publication said that VW would be looking to use Chrysler's North American distribution network to ramp up its slowing sales in the US. The report adds that with sales flagging in Europe, Fiat's management is looking to have the company quit the volume automotive business and shift its focus on Ferrari.

Both Exor and Fiat, meanwhile, stated that no discussions had taken place, and sources from VW have also said that there had been no talks about a merger.

Other reports, however, intimate that if there were a likelihood of a bid, VW would more likely be looking at Fiat's Alfa Romeo brand – which it has repeatedly expressed interest for in the past - rather than the entire organisation. Fiat's CEO Sergio Marchionne has previously stated that Alfa Romeo would be kept under the alliance's umbrella.