Fiat is trying to win back buyers with a string of new models

The Italian group behind struggling car maker Fiat Auto named a new chairman and added two members of the Agnelli family to its board last week.

Mr Marchionne has a reputation for turning round troubled companies, which he will need at Fiat.

Fiat's shares tumbled on Monday but rose after he emerged as favourite.

Mr Marchionne, who is chief executive of Societe Generale de Surveillance (SGS), a Swiss designer of inspection systems, joined Fiat's board in 2003.

The 52-year-old is credited with improving profitability in his two years at the top of SGS, and before that with restructuring Swiss chemical group Lonza, whose board he chairs.

"He gets things done," said David Loggia, a fund manager at Paris-based Carmignac Gestion said.

New top team

Mr Marchionne is now the fifth person to take the chief executive post at the Italian car maker over the past two years.

He faces a formidable task at loss-making Fiat Auto, which is trying to reverse declining market share and has pushed through 8,000 job cuts since late 2002.

He will be working with new Fiat chairman Luca Cordero di Montezemolo, who was appointed after Umberto Agnelli died of cancer last week.

Mr Montezemolo moved swiftly on Monday to reassure investors he would be sticking to the restructuring plan set out by Mr Agnelli.

Analysts had feared it would take him at least three months to get to grips with the company, which could slow down the shake-up.

At a meeting of Italian bankers, Mr Montezemolo pledged to "push ahead with the restructuring plan" set out by his predecessor and to name a new CEO "without hesitation".

"The team is there and is strong," he added.

Deputy chairman John Elkann added: "We will carry out the turnaround plan with greater speed."

Reassurance

Fiat's shares climbed to their highest level in a month, rising 4.6% to close at 6.00 euros on Tuesday - a sign that investor alarm at the departure of Mr Morchio was fading. He had been closely associated with Fiat's restructuring plan.

The new chairman, Mr Montezemolo, is the former CEO of Ferrari, Fiat's luxury sports car offshoot, where he revived the brand's fortunes. The Fiat board is hoping for a repeat performance.

One of Fiat's major creditors, Banca Intesa, has said it would continue to back the group, but auto analysts and creditors alike have stressed the importance of the restructuring plan for Fiat's future.

In his resignation statement, Mr Morchio said the restructuring plan had "begun to show its first positive results after 15 months of total dedication and intense work at the side of Umberto Agnelli".

Family firm

The shake-up at the top of Fiat was accompanied by signs that the Agnelli family - which owns 30% of Fiat - is tightening its grip on the group.

John Elkann, a 28-year old heir to the Agnelli empire, has been made vice-chairman, and Umberto Agnelli's son, Andrea, has been appointed to the board.

Fiat's new CEO has links with the Agnelli family as SGS is 23.8% owned by French industrial group Worms & Cie, which is controlled by Ifil, an Agnelli family holding group, the Financial Times reported.

His job switch has already hit SGS, which asked for its shares to be temporarily suspended on Tuesday as the rumours emerged, and Deutsche Bank downgraded the firm's stock.

"This is a very bad surprise," said Ronald Wildman, an analyst at Bank Leu.

The Fiat group has reported losses of 158m euros ($187m; �106m) for the first three months of 2004.