The worsening exchange rate differential between the strengthening euro and weakening U.S. dollar means importing European manufactured models to North America is now significantly more expensive than just a few years ago. It’s a problem Alfa Romeo has to juggle with as it attempts to re-establish itself in the U.S. next year, but there’s hope for the Italian carmaker in the form of idle capacity at American auto plants.

The CEO of Alfa Romeo, Luca de Meo, has hinted at production of Alfa cars in Mexico in the past and now he has confirmed that there were talks with Chrysler. During an interview with Germany’s WirtschaftsWoche, de Meo said Fiat, Alfa Romeo’s parent company, has held talks with Chrysler over various forms of cooperation.

Fiat CEO Sergio Marchionne has also confirmed the launch of the 500 in the U.S., telling reporters at a press event in Turin earlier this month that Fiat would begin producing cars in North America by 2010 and that the 500 could be a “smash hit” in the U.S.

At the same time, Fiat chief technology officer Harald J. Wester revealed there are two new small cars in the works and the 500 minicar will be sold in North America, although he didn’t give a timeline. He also confirmed the car would be produced at either a U.S. plant or one of Fiat’s existing facilities in South America.