Umberto Agnelli became Fiat chairman in February 2003

Mr Agnelli, 69, was appointed Fiat chairman in February last year after the death of his brother, legendary Fiat chairman Gianni Agnelli.

Mr Agnelli's death comes amidst weak sales and large losses at the group's heavily indebted car unit Fiat Auto.

His illness had prevented him from attending Fiat's AGM on 11 May.

Prior to becoming Fiat chairman, Mr Agnelli had been head of his family's holding companies, IFI and IFIL, the firm's main shareholders.

Creditors circling

He had also previously served in a variety of roles within the Fiat organisation, including a long stint as chief executive of Fiat Auto during the 1980s.

He was seen as a conservative choice for the Fiat chairmanship, vacated by Paolo Frescore in a management reshuffle after Gianni Agnelli's death.

Gianni Agnelli, the industrialist credited with transforming Fiat from an obscure Italian car maker into a major force in the global automotive industry as well as other industries, was the firm's honorary chairman when he died.

The loss of Umberto Agnelli could loosen the Agnelli dynasty's grip on the industrial empire it founded more than 100 years ago.

Mr Agnelli had adopted a strategy of nursing Fiat's core car business back to health, but the group remains under pressure to put the auto unit up for sale.

Fiat's creditor banks have an option to convert the firm's 3bn euro debt into shares next year, a move which would make them the company's biggest shareholders.

Fiat Auto's other main owners include US car giant General Motors, which holds a 10% stake.