US auto group Chrysler LLC is conducting talks with Japan's Nissan about jointly producing midsize cars in a move which could deepen their existing links, the Wall Street Journal reported Thursday.

The Journal report, which cited people familiar with the matter, said the talks have focused on the possibility that Nissan would produce midsize cars that Chrysler would sell in the United States under its own name.

A spokesman for the US car group told the Journal it had "no new alliances" to announce and declined to comment further.

The two automakers agreed earlier this year to team up on pickup trucks and subcompact cars.

The report said that if a new deal is hatched, it could potentially save Chrysler the billions of dollars it costs to develop a full line ofvehicles in-house.