Fiat paints picture with rebirth of street icon

Fiat Auto will be showcasing the rebirth of an iconic car and its own financial revival when it relaunches the Cinquecento city car at festivities around Italy on Wednesday.

The carmaker has invited more than 7,000 dealers, importers, financial analysts and others to Turin to mark the new 500's launch, 50 years to the day after its debut. Thirty other Italian cities will display the car on their piazzas.

In reviving the Cinquecento in multiple versions, with improved technology and a high price for its size, Fiat is following the lead of BMW, which has produced more than 1m Minis since relaunching an upscale version of the car in 2001.
Fiat will offer customers a choice of accessories for their 500s including chrome elements, special wheel rims and upholstery, and Italian-flag graphics, making – it says – more than 500,000 permutations possible. The carmaker is also aiming for a five-star crash-test rating, ambitious for a car barely 3½-metres long.

The Turin-based producer is also billing the Cinquecento as "the manifesto of a 'new Fiat'." Under chief executive Sergio Marchionne, the company has swung back into profit and increased its share in a tough European market. Last month Fitch Ratings gave Fiat's debt its first investment-grade credit rating in four years.

The new Cinquecento's price, starting at about €10,000 ($13,600), will put it towards the top end of Europe's growing city-car segment, where it will sit alongside models such as the Citroen C1 and Renault Twingo. Company officials try to discourage comparisons with BMW's luxury Minis, which start at €15,850 and go up to €21,600 for the Mini Cooper S.

With petrol prices high and emissions controls tightening, small cars are selling well. City and subcompact cars both expanded their shares of the European market last year.

Fiat is trying to position itself as a leader in low-emission cars as European lawmakers push manufacturers to cut their vehicles' carbon dioxide emissions by a quarter by 2012. Fiat says the 500 will be compliant with Euro 5 emissions limits from its launch, two years before the standards come into force.

The new Cinquecento will combine "emotional appeal with rational buying reasons". such as lower fuel consumption and CO2 emissions, says Kevin Gaskell of EurotaxGlass, an automotive consultancy which has done some work for Fiat.

Fiat will make the new Cinquecento in the same plant in Tychy, Poland, where it makes its Panda city car and will begin producing a new version of Ford Motor's Ka next year. Analysts say Fiat should easily meet its initial target of 120,000 sales a year, which it says it can increase to 140,000 if demand is high enough.

"Retro models have proved to be very popular, as proved by the Mini," says Jonathon Poskitt, manager of the European sales forecast with consultancy JD Power. "They will try to position it as a basic-segment car, but at a little bit of a premium to the Panda."

Prices for the new 500 are expected to go from about €10,000 to more than €14,000 for a version with a 1.3 litre diesel engine. Ford's new Ka, with a similar engine and substructure to the 500, is expected to be cheaper.

Fiat is said to be considering offering a sports version of the 500 in the US. The company does not sell cars in the world's largest vehicle market, but plans to relaunch its Alfa Romeo premium brand there in 2009.

source : www.msnbc.msn.com