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The Fiat 500

With Fiat’s future a little more certain, the OEM has been able to invest in a car that is a serious contender in the small, premium car market

By James Griffiths


Who supplies the 500? Click here...

Fiat’s Grande Punto turned out to be a massive success, but as it was launched you could almost hear Fiat holding its breath. Since then, the once-ailing carmaker has reduced its debt from €10 billion to just over €1 billion and CEO Sergio Marchionne has said the company is aiming for a trading profit of €5 billion and to overtake Japanese rivals to be the best manufacturer in terms of quality by 2010.

The new 500 will be essential in achieving these aims. Small cars have always been Fiat’s forte and the old 500 is considered an icon of the brand. The affection felt for it will partly account for the 25,000 pre-orders out of the total 50,000 cars planned for this year. But nostalgia alone will not be enough to make it a success. Fiat has invested in the quality of the 500 to make it safe and affordable, yet appealing to a wider and more premium market.

The 500 will be manufactured in Tychy, Poland, home of the Panda. It is Fiat’s best and most efficient plant. Total capacity for the 500 is 120,000, but this could be expanded. Fiat plans to produce up to 60,000 of the 500s by 2008 and expects to sell about half of them in Italy. The rest will go abroad although they are not type-approved for the US.

Three engines will be available at launch, including two petrol units – a 1.2-litre eight-valve unit that develops 51kW (69bhp) and a 1.4-litre 16v developing 75kW (100bhp) – and a 1.3l 16v turbodiesel developing 56kW (75bhp).

Fiat says the 500 will be its first car to satisfy the Euro V emissions requirements from 2009. A turbocharged version of the 1.4 gasoline engine will be introduced later, and there are tentative plans for a two-cylinder engine in the future, according to powertrain chief Alfredo Altavilla.

“The turbo Abarth version of the 500 will be at the Tokyo motor show as a concept car this year and as a production car next year,” says Altavilla. “The two-cylinder engine is under development. We have not decided if it will be packaged on the 500. It will be launched before mid-2009 on a number of A segment Fiats and probably B segment too. There is a high likelihood it will be on the 500, but this will not be its first application.”

There are no new suppliers contributing to the 500, but Fiat engineering chief Harald Wester says trying to spread the appeal of the 500 as widely as possible has thrown up some manufacturing challenges.

“It is the most customisable Fiat we’ve ever produced,” says Wester. “Some of the customisation items are very complex and can’t be handled by the dealers. To get the stickers applied to the right standard, it had to be introduced into the factory. That required some reorganisation: space had to be dedicated and people trained.”

Fiat is counting on the 500 to be a success and is looking to expansion, especially as in 2008 Ford will begin production of its new Ka at the Tychy plant, built on the same platform as the Panda and the 500.

The need to accommodate other cars on the same floor pan was partly why the 500 will have its engine mounted in the front, not the rear, as with its predecessor. It will also help with the safety rating, which Fiat is hoping will lead its class. A specifically designed front end improves compatibility with larger vehicles during impacts. Seven airbags are standard on all but the basic model.

Although Fiat says the introduction of the Ka will not affect production of the 500, there is talk of building a second plant. “With the Panda, 500 and the Ford, we’ll produce half a million units from one plant,” says Wester. “To expand production further, it would be wise to invest in a second production facility for a car produced on this architecture.” No location was named, but Fiat CEO Luca De Meo says it would be “strategic” to have a plant in Brazil.

Sharing the plant and platform means break-even is well inside the projected volume of 120,000 cars. It is cheaper to produce than BMW’s Mini remake and sells for less – between €10,500 and €15,000. It is not clear what the 500’s direct contribution will be to Fiat’s profit target of €5 billion by 2010, but it’s an important step in the company’s development.

Who supplies the Fiat 500?