Wall Street Journal - July 5, 2007

Tychy, Poland -- From the unglamorous setting of a former Communist
factory in southern Poland, Italy's Fiat SpA is launching a car it
hopes will attract a new generation of European drivers with a sense of
fun and money to burn.

Fiat, based in Turin, Italy, is bringing back its cherished 50-year-old
Cinquecento, or "500" in Italian. But it is revving up this updated
version from the entry-level 500 mini that helped modernize Italian
industry in the late 1950s.

Marrying power with style, Fiat wants the 500 to echo the success of
the Mini that BMW AG revived in 2001, while charging a premium in the
process. Fiat's new three-door mini will be equipped with a range of
engines and the latest in-car gadgetry offered as extras, carrying a
lofty price tag expected to be close to 12,000 euros, or about $16,000,
for a basic model. Fiat didn't give an exact price range ahead of
today's launch.

But Fiat isn't BMW, and the new 500 steers Europe's fifth-biggest car
maker by volume away from the inexpensive small cars for which it is
best known.

"I'm not a fan of introducing [more] low-cost cars in Europe," Luca De
Meo, chief executive of Fiat Group Automobiles SpA, Fiat's auto unit,
said at a conference in Prague last week. "We did it for years and we
went almost bankrupt."

Thanks to a revived vehicle line up, Fiat's auto operations returned to
profitability in 2006, after years of losses. But to succeed with its
500, it will have to convince customers that it is worth a BMW Mini-
sized price, despite being built on the same platform as Fiat's entry-
level Panda mini model.

"I like the look of it," says Alice Giovannini, a marketing executive
in Milan. But price is still a factor, she said. "This is a Fiat and it
may not be the greatest quality car. If it's going to cost me 12,000
euros, I want everything in there: air conditioning, MP3 player, all
that stuff."

Fiat officials declined to comment for this article.

Fiat is rolling out its entry in the market for hip, upscale cars at a
time when many of Europe's auto makers are seeking ways to bolster
their lineup of models. Toyota Motor Corp. and other Asian auto makers
are capturing an increasing share of the European market, particularly
for low-cost, mass-market vehicles. And the overall market is moribund -
- European Union car registrations, a proxy for new-car sales, are down
0.8% for the first five months of the year, according to the European
Automobile Manufacturers Association.

That has put pressure on Fiat and other auto makers to differentiate
their products, and increase the appeal of the higher-end, higher-
margin market over the mass market. But giving a brand a hip new aura
can be tricky. Fiat's new product takes aim at the same market as BMW's
hot-selling Mini http://dn.vc/BMW_Mini . But Volkswagen AG's revival of
its famous Beetle in the late 1990s may prove instructive: though
welcomed in some markets, sales momentum faded over the years, with
critics saying the car cost too much. VW cut prices in the U.S. last
year to sustain demand.

Mr. De Meo said in Prague last week that Fiat has already received
orders for 25,000 of the new 500 model, and projects sales of 58,000
for 2007 and about 120,000 in 12 months. Fiat is also introducing
various marketing techniques to help stimulate demand. Potential
customers can go to the Internet to custom order the versions they
want, a step that appealed to a potential customer like Ms. Giovannini.

Industry observers say Fiat will probably do well with the 500 in Italy
but are skeptical about its success elsewhere.

"People don't buy the BMW Mini just because of nostalgia for the old
Mini," says Stuart Whitwell, joint managing director of brand-
valuation consultancy Intangible Business in London. "They're also
buying a BMW, they're getting a quality car.

"Though it may well do well in Italy and some other parts of southern
Europe, I don't think it's iconic enough to do well in other markets,"
said Mr. Whitwell.

Fiat dominates the Italian market, making about one in every three new
cars registered. But some say Fiat may find difficulty selling
significant volumes of a premium-priced mini in other markets.

"The crux of the discussion on the 500 is price," says Sanford C.
Bernstein analyst Stephen Cheetham. "Will consumers think it is special
enough to pay a premium versus all the other perfectly competent entry
level cars on the market? It's possible in Italy where the reserve of
goodwill for Fiat is strong, but we'd suspect it's a lot tougher
elsewhere." Mr. Cheetham has a "sell" rating on Fiat shares.

To contain production costs, Fiat is building the 500 at a factory
here, near the Czech border. The company has been making cars in Tychy
since it made a deal with Communist authorities in the early 1970s.

The advantages of making cars in Poland rather than Italy are striking
in terms of labor costs. According to Italy's national statistics
institute Istat, the average gross monthly wage in Italy in 2006 was
2,870 euros. Poland's GUS statistics agency says the average monthly
private-sector wage in 2006 was 2,644 zlotys ($960), or 705 euros.

That attraction hasn't been lost on other car makers. South Korea's
Hyundai Motor Co. chose the Czech Republic for its first car-making
plant in Europe, and began construction in April with plans to invest
1.1 billion euros and produce 300,000 cars a year there by 2011. Last
year, Japan's Toyota said it will invest another 145 million euros in
its Polish gearbox production plant, and France's Renault SA said
earlier this year that it is stepping up production of its Logan no-
frills sedan at its Dacia unit in Romania.

The Tychy plant is central to Fiat's plans. The company expects to make
at least 120,000 of the 500s a year, equal to more than 5% of the
company's overall global production of just under two million vehicles
in 2006. Tychy will also within two years be making Ford Motor Co.'s
revival of its own Ka mini at the plant as part of an alliance between
the two car makers. The upgrades will make Tychy factory the Europe's
largest automotive plant, with a total capacity of half a million
vehicles a year.

"Of course Mini's recipe for success spurs others to follow," said BMW
spokesman Markus Sagemann. However, "as a premium offer in the small-
car segment, the Mini continues to have a unique position," Mr.
Sagemann added.
==========
http://dn.vc/Fiat

On 5-Jul-2007, Ted <Use-Author-Supplied-Address-Header@[127.1]> wrote:

Bring back the Fiat 126, a thrill to drive, and spares were cheap.
Tanked round bends full throttle with a vicious understeer that
left BMW's behind.
What more could you want?
Quite economical on fuel as well, definately green.

On Thu, 5 Jul 2007 15:54:10 GMT, ato_zee (AT) hotmail (DOT) com wrote:

0-40 in 12 seconds, another three days to get to 60! But yes, I agree a
fun car, I had one as a runabout for a while, Restored it, sold it to my
sister, who blew the engine up (that's at least two engines she's
blown), gave me it back and I managed to sell it again!
--
Regards, Chris (Please take out my car to reply by plain text email)
---1967 Riley Elf---1978 Mini 1000---1971 Mini Clubman---
----1972 Mini Clubman estate----------1979 Ford Capri----
-----1966 Triumph Herald Estate------1957 Standard 8-----

"Chris Bolus" <chrisB (AT) 78MINIb0lus (DOT) com> wrote

One of the more recent arrivals in our local classic car club is a very nice
125S. Now, that thing goes well! (once the rust issues are sorted, of
course).

Graham

ato_zee (AT) hotmail (DOT) com wrote:
base model will be around £3k ($6k) cheaper than equivalent 500 whats the
USP of the 500?

Here's what the Sunday Times UK published yesterday:

http://driving.timesonline.co.uk/tol/life_and_style/driving/new_car_reviews/article2036127.ece

I have copied the text below my signature.

DAS

For direct replies replace nospam with schmetterling
---
From The Sunday Times

July 8, 2007

Fiat 500
The new king of cute

Richard Bremner
If the original Fiat 500 were still around it would be celebrating its 50th
birthday. This twin-cylinder, puttering bubble of a car helped motorise
postwar Italy, driving its way into the heart of the nation, and much of
Europe too.

Alas, the last Fiat 500 rolled off the production line 22 years ago but,
inspired by the success of other relaunched classics like the VW Beetle and
the Mini, Fiat has revived it. The (re)launch party was in Fiat's home city
of Turin, accompanied by a fireworks display. Fiat has more to celebrate
than the rebirth of its most famous product; the company is now in profit
after three perilous years of loss that had its survival in doubt. A
fast-renewing range - it is also about to release the Bravo hatchback - has
turned its fortunes around.

This new Fiat 500 makes you pleased that the Italian company didn't go the
way of Rover. A glance at it has you smiling - this is an old friend in
modern wrapping. You will be amused by the reappearance of the circular
headlamps that created the earnest little face of its predecessor, and the
Mona Lisa-like smile suggested by the chrome strip on its nose. There are
retro references inside too, including a circular instrument pod and a
body-coloured dashboard.

Though instantly identifiable as an interpretation of the original, the
substance of this new 500 couldn't be more different. The 1957 edition was
rear-engined, its air-cooled twin cylinder hard pressed to push the Fiat far
beyond 60mph. Today's 500 is based on the Fiat Panda, its four-cylinder
water-cooled engine driving the front wheels. This time you get a choice of
engines, including a 69bhp 1.2 litre petrol, a 100bhp 1.4 litre twin-cam
six-speed version of the same engine, and a 75bhp 1.3 litre turbodiesel.


Car or myth? The new Fiat 500
An updated version of the unlikely transport of the Latin lover has been met
with an outpouring of nostalgia and pride

a.. Small but still perfectly formed - Italy unveils new Fiat 500 at 50th
birthday extravaganza
a.. Fiat - back from the brink
a.. Fiat brings back famous 500
Background
a.. Fiat Croma review
a.. Fiat Multipla review
a.. Fiat Panda review
a.. Fiat Punto review
Background
a.. Fiat Panda 100HP review
a.. Fiat Panda 4x4 review
a.. Fiat Punto review
a.. Fiat Panda review
a.. Fiat 500
Multimedia
a.. Fiat 500 picture gallery
More impressive still is that this baby car, aided by seven airbags, scores
the full five stars in the Euro NCAP occupant protection crash test. It has
antilock brakes as standard and can be ordered with electronic antiskid
control.

But enough of the serious stuff: this car is meant to be fun and in that
spirit Fiat will offer it with myriad paint jobs, trim and accessory
options. There are also 100 accessories to choose from including a fragrance
diffuser, a navigation system, chromed door mirror capping, a ski rack and
an additional front bumper bar just like the one worn by deluxe versions of
the original 500.

None of it would matter much if this Fiat didn't measure up, but the good
news is that it is a thoroughly capable and hugely enjoyable car to drive.
It is both refined and quiet: conversation is easy even at the 100mph
maximum of the basic 1.2 tested, and the lack of wind, road or engine noise
at speed makes long journeys - for two, at least - entirely palatable.
There's
room for four but adults will feel confined, and they'd have to travel light
because the boot is compact. However, for a city car, accommodation is fine.

Although the 1.2 is not the briskest thing its lower power and lower price
are true to the spirit of the original, and the engine's smoothness makes
you more than happy to work the gearchange hard, just as old 500 owners did.
They would have had to double-declutch to deal with the unsynchronised cogs,
whereas the new box is light of movement, its lever capped with an amusingly
oversized gobstopper of a knob.

As with many Fiats, the power steering has two settings, the lighter for
town work, and it changes the 500's direction with alacrity. That makes it a
game partner on a twisty road. It's not quite as sharp as a Mini, or Ford's
ageing but still excellent Ka, but it's good enough to be fun. Better still
is a surprisingly pliant ride, and a robust feel over rough roads,
confirming the impression that this is a very well made little car.

Quality, claims Fiat, is of a higher order than Toyota achieves, and
underpinning this claim is an extended warranty - admittedly optional - that
will cover the car for five years and a staggering 300,000 miles. That alone
is a sensible reason to buy. But we suspect that for most people the
decision to purchase this excellent Fiat will be made with the heart, not
the head.

Vital statistics

Model Fiat 500 1.2 8V Pop

Engine type 1242cc, four cylinders

Power/Torque 69bhp @ 5500rpm / 75 lb ft @ 3000rpm

Transmission Five-speed manual

Fuel/CO2 55.4mpg (combined cycle) / 119g/km

Performance 0-62mph 12.9sec / Top speed: 100mph

Price £9,300 est

Verdict Cute, well made, practical, charming and hard to resist

Rating

Date of release January 2008

The opposition

Model Mini One £11,525

For Cute and cultish, finish, verve and economy

Against Pricey, poor space efficiency

Model Ford Sportka 1.6i SE £9,995

For Stylish, brilliant to drive, surprisingly practical

Against Old, low quality interior, soon to be replaced



"Tommy" <Tommy (AT) emilll (DOT) co.uk> wrote

"Chris Bolus" <chrisB (AT) 78MINIb0lus (DOT) com> wrote


Is that your lesbian sister by chance?
Great restoration BTW, I'll know where to come when i want a cowboy re-build
then