Sergio Marchionne, the former head of Italo-American carmaking giant Fiat Chrysler has died aged 66, his former company has said.

"Unfortunately, what we feared has come to pass. Sergio Marchionne, man and friend, is gone," Fiat Chrysler Automobiles (FCA) Chairman John Elkann said in a statement.

Read more: Shark in a sweater: Sergio Marchionne's legacy at Fiat Chrysler

Marchionne had stepped down from his position on Saturday due to ill health following what the holding company of Fiat's founders, the Agnelli family, described as "unexpected complications" from shoulder surgery in a Zurich hospital.

He was replaced by Briton Mike Manley, bringing his 14-year tenure at FCA to an end.

"The best way to honor his memory is to build on the legacy he left us, continuing to develop the human values of responsibility and openness of which he was the most ardent champion," Elkann said. 

Chrysler's savior 

Marchionne, who was Italian and Canadian, joined Fiat in 2004 and led the Turin-based company's merger with bankrupt US carmaker Chrysler.

He was handpicked by the US government to save Chrysler and is credited with turning the dysfunctional companies into the world's seventh-largest automaker.

Marchionne was known for his folksy, colorful expressions and for his dark cashmere sweaters, which he was rarely seen without.

Other successful business ventures included the spinoff of the heavy industrial vehicle and truck maker CNH and the Ferrari supercar maker. Both of these deals have opened considerable shareholder value for Agnelli family heirs led by Elkann.

law/aw (AP, AFP, dpa)