The Fiat Group could accelerate the sale of its embattled automotive unit, Fiat Auto, when Umberto Agnelli replaces his late brother, Giovanni, as chairman of the company, analysts say.

The Fiat Group could accelerate the sale of its embattled automotive unit, Fiat Auto, when Umberto Agnelli replaces his late brother, Giovanni, as chairman of the company, analysts say.

Agnelli is believed to be more likely to allow General Motors to buy the remaining 80 per cent of the loss-making car unit. The Agnellis, one of the five richest families in Italy, will soon seek the chairmanship of the Fiat Group for Umberto after his brother Giovanni died of prostate cancer on Friday.

"Giovanni was the only one in the family who didn't want to sell the auto business to General Motors, so now that he is gone, it's a sure thing that they will sell," a source told .

As CARtoday.com reported recently, Fiat Auto lost about R12,35 billion last year and Fiat shares shed more than half their value. Giovanni Agnelli was committed to management's plan to save the auto unit by firing workers and selling assets to cut debt - but that policy could very soon change.

"The auto business was his life. Fiat without its auto unit was something unthinkable for him," former Fiat Chairman Cesare Romiti told news agency Ansa. "I know how much he suffered over the last years because of the Fiat crisis."

Fiat entered into an alliance with General Motors in 2000, when the US giant bought 20 per cent of Fiat's car unit in a bid to strengthen its European business. As part of the alliance, Fiat has the right to force General Motors to buy the rest from next year.

The Fiat put option is "viewed as something that really can destroy value for (General Motors) investors," said Rod Lache, an analyst at Deutsche Bank Securities, who rates the company a "hold" and doesn't own shares. "We've never seen the merits of the combination."

Umberto Agnelli spent much of his career running two of the family's investment companies set up to diversify the Agnellis' interests beyond the car business.

The family this weekend also named Umberto Agnelli as head of Giovanni Agnelli & Co, the holding company that controls all the family's investments, including its 30 per cent stake in Fiat. Giovanni Agnelli died about half an hour before the start of the holding company's meeting, after treatment for prostate cancer.

"Fiat wants to sell its car business," said an Italian automotive industry analyst. "There's less of a resistance to a sale now that Umberto is at the head of the family."