Chrysler LLC is making progress in restructuring talks involving the U.S. government and has no plans to file for bankruptcy before its month-end deadline, the automaker told its U.S. dealers on Friday.

Chrysler Vice Chairman Jim Press and sales chief Steve Landry told U.S. dealers on a conference call that the automaker expected talks aimed at clinching an alliance with Italy's Fiat SpA to run all the way to an April 30 government-imposed deadline, according to two people who participated in the call.

Press also told dealers that they should stay focused on selling Chrysler vehicles during the last week of the month, traditionally the busiest time for auto sales, and that the dealer inventory is continuing to decline, said the sources, who asked for anonymity because the conference call was confidential.

The conference call came a day after reports that the U.S. automaker was readying a bankruptcy plan, but remained focused on reaching an alliance with Fiat supported by the U.S. government.

(Reporting by Poornima Gupta)