Fiat will focus on revamping its Alfa Romeo brand after its planned merger with Chrysler and will keep production of the marque in Italy as it seeks to revive its European operations and protect jobs, said its chief executive.

In an interview with Italian daily La Repubblica, Sergio Marchionne sought to reassure unions and politicians worried the merger with US group Chrysler could signal a shift away from the firm's home market, where Fiat was founded 115 years ago.

"Just as the Jeep is sold in the whole world but is American to the bone, so Alfa's DNA has to be authentically all Italian," he said. "It will indeed remain at home."

Marchionne is betting on the sporty Alfa brand because he believes it can deliver the global profile that the mass-market Fiat brand cannot and far greater sales volumes than top-end Maseratis, but the strategy has so far been met with scepticism.

Fiat acquired the Alfa brand in 1986 and has since failed to revive it despite repeated attempts.

In the first interview since striking a landmark $4.35 billion deal to gain full control of Chrysler, Marchionne said a potential move of the group's listing or headquarters outside Italy was symbolic and did not mean production would be moved.

Italy's coalition government, desperately trying to protect jobs, has been closely watching the merger talks for any signs that Fiat could further diminish its presence in the country.-Reuters