Private equity firm Blackstone Group has emerged as a leading contender to buy the troubled U.S. division of German automaker DaimlerChrysler AG (DCX), The Detroit News reported on its Web site on Saturday, citing people familiar with the situation.

The paper said that Blackstone is moving forward with a detailed analysis of Chrysler's finances and operations with an eye toward making a formal bid, citing people familiar with the Chrysler sale process. Other possible buyers include Cerberus Capital Management, the paper said.

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Blackstone and Chrysler were not immediately available for comment.

Two sources close to the sales process told Reuters last week that a detailed sales prospectus for Chrysler Group bidders should be completed soon, the first step toward a potential sale that would unwind the 1998 merger that created DaimlerChrysler.

Private equity firms are expected to be among the potential bidders for Chrysler that would consider the automaker's sale-related documents, the sources told Reuters.

Meanwhile, General Motors Corp. (GM) has held preliminary talks with DaimlerChrysler about an outright acquisition of Chrysler or some kind of alliance with the automaker, sources have previously told Reuters.

Other automakers — including Germany's Volkswagen AG, Italy's Fiat SpA, affiliates Renault SA of France and Nissan Motor Co. Ltd. of Japan and South Korea's Hyundai Motor Co. Ltd., have said they are not interested in buying Chrysler.