Daimler AG is in talks with private equity group Cerberus Capital Management to sell its remaining 19.9 percent stake in struggling U.S. automaker Chrysler LLC.



Cerberus, which bought 80.1 percent of Chrysler in May 2007 in a $7.4 billion deal just before a sharp slowdown in overall U.S. auto sales, said on Wednesday it had approached Daimler for a possible sale.



It is unclear at this time how much Daimler's stake in Chrysler would be worth. Daimler said in July the book value of its stake was 171 million euros.



The move comes as Chrysler faces scrutiny over whether it has the cash to ride out a downturn in U.S. auto sales that many analysts expect to stretch through 2009.



'It's still very early to tell why this is happening,' Aaron Bragman, auto analyst at Global Insight, said.



Bragman said it was unclear what had prompted the sale talks between the two Chrysler stakeholders, adding that it was possible Daimler had decided to cut its losses or was taking advantage of an unpublicized provision of the original sale contract.



'Maybe it's a prelude to Cerberus taking total control before a sale to a third party,' Bragman said. 'We will just have to wait and see.'



In the event of a deal, all existing industrial relationships between Daimler and Chrysler would continue, Cerberus said.