Thursday, July 17, 2008


Retro is still cool, according to Fiat, which has already tapped into its past for a new badge and created a fashionable range of merchandise featuring its logo style from the 1920s.

The latest Fiat 500—cinquecento in Italian—is also about reestablishing Fiat's Italian pride. Five years ago, Fiat was in dire straits and seemed certain to fall into the arms of General Motors under an agreement made in 2000. Sergio Marchionne, a Canadian-Italian businessman, was appointed CEO of Fiat in 2004 and given the freedom to do whatever it took to turn the company around. His first action was to negotiate a divorce settlement with GM, which ended up costing the General $2 billion. A jubilant and now cash-rich Fiat put ads in newspapers throughout Italy proclaiming, "Fiat is Italian again."

Small cars are Fiat's specialty, and a range of new ones—starting with its cheapest model, the Panda, and following with the Grande Punto—has improved Fiat's sales. Following the success of the modern-day Volkswagen New Beetle and Mini Cooper, Fiat presented the Trepiuno concept at the 2004 Geneva auto show. The concept borrowed the design of the 1950 Nuova Fiat 500 but was built on a modern Panda platform. Three years later, and 50 years to the day after the first appearance of the iconic original, a party that involved the whole city of Turin welcomed the debut of the '08 500.

Film buffs will remember the old 500 from La Dolce Vita and some of Fellini's other films. It was tiny (116 inches long), had suicide doors, two seats with room for luggage where the back seats would be, and a spartan specification—a rear-mounted 479cc engine and a four-speed manual transmission without the benefit of synchromesh. In postwar Italy, owning one was a rite of passage for Italian motorists.

The new car has no relationship to the old, other than the surprisingly faithful adaptation of the body shape. The '08 is significantly larger—it's 139.8 inches long—accommodates four people, and offers a range of gas and diesel four-cylinder engines that drive the front wheels. The cabin has the spirit of the original, with its simple cream-colored plastic that looks like Bakelite, but it also has modern conveniences: seven airbags, climate control, and a connector for your iPod.

Luca De Meo, the youthful Fiat brand boss, admits the success of BMW's revisionist Mini did influence some of the reborn 500's traits. Like the Mini, the 500 is ripe for customizing. There are 11 exterior colors, seven trim levels, 19 decal packs, and more than 100 accessories available at launch. And like the Mini, there will be a family of 500s, including a convertible and a wagon.

There is a big difference between the price of the Fiat and a Mini Cooper. Fiat 500 prices in Europe start at about $16,000. If that seems high, blame the weak dollar; this price point is about $6000 less than what the cheapest Mini costs in Europe. And although its German owners are content for the Mini to be a stand-alone brand, the 500 is actually Fiat's halo car, albeit its smallest model, but one that sells for a premium and will likely enhance Fiat's reputation. You could call it bottom-up marketing.

Riding atop the Panda's front-drive platform, the 500 handles well. With a lower center of gravity than the Panda and a wider stance, the 1.4-liter 500 feels better than the equivalent Panda. It is an entertaining drive, with enough power to spin its front wheels, a slick six-speed gearbox that does a good job of compensating for the engine's lack of torque, and a sport button that increases the effort of the electric power steering while increasing throttle sensitivity. The seating position is a bit too high and the interior trim doesn't feel quite as good as it looks, but the designers deserve credit for the new-old style of the single instrument, which houses a speedometer and tachometer in concentric circles and has an electronic display at the center.

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