Italian Pride Is Revived in a Tiny Fiat

When Luca De Meo, 40, became chief executive of the Italian carmaker Fiat Automobiles five years ago, one of his relatives — he forgets whether it was his aunt or his mother — told him, “Luca, you’ve got to bring back the 500,” or the Cinquecento, the chubby little car that symbolized Italy’s postwar economic miracle.

And now, following in the tire tracks of the latter-day Beetle from Volkswagen and the Mini Cooper from BMW, Fiat this month began selling an updated version of the classic 500 of 1957. At 11 feet 6 inches in length, it is about 4 inches shorter than the Ka, Ford’s tiny runabout, but 18 inches longer than the original 500.

More than a year before the car arrived, Fiat started marketing it as a return to everybody’s childhood. In Italy, advertisements appealed to patriotism, with slogans like, “The new Fiat belongs to all of us.” Fiat offers extras on the car like a side stripe in the colors of the Italian flag — red, white and green — and little Italian flags stitched into the upholstery.

In France, where the original 500 was lovingly known as the “pot de yaourt,” or pot of yogurt, for its soft shape, the ads read, “The new Fiat is your history too.”

In less than a month, Fiat has sold more than 57,000 of the cars.

The intrigue surrounding the 500 comes as carmakers in Europe are taking a new look at small autos. European cars have grown over the years, along with European pocketbooks, but with cities getting more congested and gasoline prices at $5 a gallon or higher, carmakers have been anticipating renewed interest in small cars.

Now the market is being flooded with such cars. BMW introduced an update of the Mini late last year, and Renault replaced its little Twingo in June. Daimler is preparing to send its tiny two-seater, the Smart, to North America, and most of the Japanese carmakers have what the Europeans call “city cars” as well.

All these new and retro models are hitting the market just as European car sales have flattened, creating a buyer’s market and forcing carmakers to devise ways to attract customers.

Many carmakers see retro models as the answer, because they are instantly recognizable and stir up nostalgia.

To some, like Marco Zurru, an auto industry consultant with Roland Berger, marketing a car like the 500 for its style is something of a paradox, because the original 500s were stylish by accident.

“Don’t forget, the original 500 sold four million cars,” Mr. Berger said.

At the same time, the new 500 is economical, borrowing a variety of components — including the platform, the engine, the transmission, the rear suspension, and most of the electrical and electronic equipment — from Fiat’s Panda, another compact car that is assembled with the 500 at Fiat’s big new plant in Tychy, Poland. Factory workers there make about $1,200 a month.

Indeed, some have called the car a Panda in the skin of a 500. (As an extra, you can even buy a car cover printed to look like the old 500 of 1957.)

Bringing costs down further, Fiat is sharing the 500’s platform with Ford, which will shift assembly of its new Ka next year to the plant in Poland, from Valencia in Spain.

If the 500 is built differently, it is sold differently as well. Five hundred days before its introduction, Fiat asked potential buyers to enter a competition over the Web to design accessories for the car, and about 8,000 people did so. (The prize? Free accessories with the purchase of a 500.) Among the most popular of those customer-designed extras, at least in Italy, are a clear sunroof and the Italian colors as decoration.

The car has about 100 options, including hand-stitched leather steering wheel covers from the furniture maker Poltrona Frau, 11 colors, and 7 interior trims. Prices start at 10,500 euros, or about $14,400, and can easily run up to 14,000 euros.

Fiat says the 500 is safe, too, despite its diminutive size. It comes with seven air bags, helping to earn it five stars, the highest rating possible, in the standardized European frontal collision test.

“Like the Mini, you buy it because it’s interesting, beautiful things for the beautiful,” said Martino Boffa, the managing director in Milan of the marketing consultants Icon Added Value. He added, “It’s not functional; it’s a luxury item; it’s a toy.”

Mr. De Meo, who was a sales executive at Toyota and Renault before joining Fiat, compares the 500 to the Bic pen. “In the 1950s there was one Bic, and it was black,” he said. “Now there are 50 varieties.”

Luca Trazzi, whose design firm, designboom.com, organized the accessories competition, with a jury that included the fashion designer Giorgio Armani and Jasper Morrison, the industrial designer, said the 500 and the Mini were both “translations of old styles.”


The appearance of the new 500, he said, has stoked demand for old ones, which were discontinued in 1974. “People are paying double what you pay for a new 500, for any kind of 500, even 500s from the 1970s,” he said.

Of course, the new 500 has its critics in Europe. Reviewing the 500 for Le Monde, the French newspaper, Jean-Michel Normand asked whether “the neo-retro inspiration is the only path forward in producing original and desirable small cars.” He added, playfully, “So what is Citroen waiting for to give us a new 2CV?,” referring to the classic 2-horsepower runabout.

To be sure, the 500 is a classic in North America. There are 500 clubs across the United States and Canada, as well as Web sites and blogs devoted to it. When the Pixar unit of Walt Disney released the animated film “Cars” last year, it featured a yellow 500 named Luigi, who spoke accented English and changed tires during pit stops.

Yet Mr. De Meo says he has no plans to sell the 500 in the United States, lacking a distribution network, even though his boss, Sergio Marchionne, 55, a native Italian who grew up and was educated in Canada, has said he wants Fiat to re-enter North America in 2009 with the Alfa Romeo brand.

Mr. De Meo says the 500 “will not be global in the strict sense, but will be for mature, sophisticated markets.” He added: “A product becomes global because its image is global.”

For all its global ambitions, Fiat has cast the introduction of the new 500 as a very Italian event. Daniele Cuniberto, the sales manager at Torino Auto, a dealership a short walk from the Fiat headquarters, said that stripes on the side in the Italian colors were the second most popular extra, exceeded only by the clear glass roof.

For Mr. Boffa of Icon Added Value, Fiat has made the 500 “a national event, saying, ‘We’re Italian, we have saved Italy.’ ” The marketing in Italy, he went on, “arouses national sentiments.”

“There’s a moralizing, chauvinistic aspect. If you’re Italian, you have to buy a Fiat.”

Indeed, roughly one-third of all cars bought in Italy are Fiats. A local economic research firm, the Centro Einaudi, recently calculated that the Fiat Group, with its myriad businesses including farm and construction equipment, accounted for as much as 30 percent of Italy’s economic growth.

But will this work outside Italy? Mr. Zurru of Roland Berger thinks so. “At least in Europe,” he said, “the 500 is linked to a cinematographic experience, a model rich in symbolism.”

“You know,” he said, “La Dolce Vita.”
(C)NYT

Low-Cost Chinese Cars Making Restrained Entry to European Market

After a rocky start, Peter Bijvelds has hopes for the Landwind autos he imports, saying Chinese cars offer European buyers the value they seek.

They have names like the Brilliance BS6, the Landwind Fashion or the improbable Hover Wingle, and though these sedans, vans and sport utility vehicles are hardly as familiar to Europeans as, say, a Volkswagen Golf, they are beginning to show up on European roads.

“I’ve got air-conditioning, ABS brakes and air bags,” said Carlo Scalvini, describing his Hover, a big and boxy sport utility vehicle built by the Great Wall Motor Company, with headquarters in Baoding in eastern China. “And the price is competitive: you pay 10,000 euros less in the end,” more than $13,000.

The enthusiasm of people like Mr. Scalvini could influence the global auto industry and China’s place in it. China’s quiet inroads into Europe are the first test of rich markets by Chinese automakers as they build dealer networks and deliver small shipments of cars to test the reaction of drivers and auto industry experts.

Many of the dealers who have signed on with the Chinese previously worked with the Japanese and the South Koreans, and so have experience in coaxing Europeans to purchase cars with unfamiliar names and unusual looks, but sweet prices.

If business is starting fitfully, they foresee healthy profits down the road, aided by the weak dollar. European car dealers pay in dollars for the Chinese cars, yet are paid in strong euros when they resell them, pocketing nifty profits from exchange rates.

“The game the Japanese mastered in 15 years, and the Koreans in 10,” said Nigel Griffiths, director of European light vehicle forecasting at Global Insight, “they will do in 18 months to 5 years.”

Paradoxically, the Chinese have been helped in Europe by their alliances with Western automakers in China. Some of the Chinese cars being imported into European countries use electrical components from Bosch, the big German parts supplier, or have been designed by Italian firms like Giugiaro. Now, the Europeans are seeing their ideas and components flow back into their own markets.

That the European market is essentially open is also helping the Chinese. Because so many European cars are now being built elsewhere, a quota on imports is politically almost impossible.

There have been setbacks, like abysmal results on a crash test done on a Chinese car two years ago. Some specialists are skeptical that the Chinese can become major competitors in Europe and the United States. After all, car buying remains an emotional business. “There is a general lack of brand awareness, and distribution is a hurdle,” said Michael K. McKenzie, a China expert at PricewaterhouseCoopers’ automotive institute in Detroit.

But the Japanese and South Koreans overcame similar hurdles. Moreover, the Chinese are moving in several stages. “They are coming through the back door: first Russia, then working their way west,” Mr. Griffiths of Global Insight said. He estimates that China will sell 54,000 cars in Russia this year, out of a total market of two million, compared with 31,000 last year.

The Chinese are arriving even as European carmakers struggle with flat prices and diminishing profit, and the Chinese presence is expected to ratchet up the pressure. That will force some European companies that stayed in the mass market for small cars, like Fiat, either to move up to larger, more expensive models, or to perish, Mr. McKenzie predicted. “They will undercut these companies, and the market will be more contested,” he said.

It began when a Dutch Nissan dealer, Peter Bijvelds, visited China with a friend in 2004 to inspect the Landwind factory in Nanchang, a gritty city south of the Yangtze River in Jiangxi Province. The trip ended with Mr. Bijvelds’ introducing a big and boxy Chinese-made S.U.V., the Landwind New Vision, a twin of G.M.’s Opel Frontera, at the 2005 Frankfurt auto show. It did not handle like a European car and its engine had little excess power, but for Europeans tired of station wagons or wanting to tow a trailer, this car cost 25 percent less than a Kia or a Hyundai model. It had air-conditioning, air bags and aluminum wheels. In the first two weeks, Mr. Bijvelds said, he sold 500 of them.

Then, at about the time of the Frankfurt show, the German automobile club, known as ADAC, put the New Vision to a crash test. The driver’s survival chances were about nil, the club’s testers said.

Mr. Bijvelds’ Chinese partners were dismayed. The New Vision was put aside while Landwind ironed out the kinks. A successor model, the Landwind Expedition, has a comely design by an Italian design studio, a German-built engine and all European safety features.

Mr. Bijvelds suggested that the automobile club might have been prompted by German automakers to undermine his project. A club spokesman, Maximilian Maurer, denied that. “I am sure that in time the Chinese will succeed here,” he said, “and the ADAC doesn’t want to keep them away. We simply want to inform consumers about the quality of these cars.”

Mr. Bijvelds, 28, receiving a visitor at the headquarters of his Landwind Motor Corporation near Antwerp, Belgium, said, “We get so many products from China with Western brands, why not cars?” Europeans, he says, are after value, citing Renault’s recent bonanza with the Logan, a car built in Romania that has a six-month waiting time for delivery in Belgium. “They want a lot of car for a little money,” he said.

The German crash test, a colleague told him recently, may have been a blessing in disguise. “Now everybody knows you,” the friend said, “For good or bad, they know you.”‘

In Germany, Hans-Ulrich Sachs, a former Volkswagen executive who is chairman of HSO Motors Europe, is signing on dealers to sell the Brilliance BS6, a comfortable sedan with a vague resemblance to a midsize BMW. Indeed, Brilliance assembles BMW’s 3 and 5 series cars for the domestic Chinese market.

By the end of this year, Mr. Sachs, 54, wants 150 showrooms in Germany, and by next year, 1,100 throughout Europe. This year, he hopes to sell 6,000 to 7,000 cars. The first 500 arrived in mid-March.

Why would a German buy a Chinese car? he asked rhetorically. “Value for the money.”

For Europe’s carmakers, alliances with Chinese companies could become two-edged affairs, providing models that one day may well compete against their own cars. Volkswagen, for instance, has joint ventures with Shanghai Automotive and First Auto Works. Yet Kai Grüber, spokesman for the Volkswagen Group China, played down the potential for competition, saying that VW focused for now on the domestic Chinese market. “Future exports into the Southeast Asian area are conceivable in markets where we can expand our offering with new models,” he said.

At Eurasia Motor here in Palazzolo, about 35 miles northeast of Milan, where Mr. Scalvini bought his S.U.V., a shipment of 360 arrived in November, and have all been sold through a network of 95 Italian dealers. “We’re now expecting 800 more — in lots of 200 each — of the same model,” said Federico Daffi, Eurasia’s chief financial officer. Eurasia pays Great Wall $14,000 for the S.U.V.’s, and sells them for as little as 19,600 euros (about $27,000), still one-fourth below the South Korean competition. Eurasia then uses the lower price to market to middle-class families who until now could not afford an S.U.V.

Mr. Scalvini, 44, would buy more Hovers now, if they were available. He is the owner of Consorzio Vela, a company that employs about 800 people and maintains a large fleet of vehicles supplying services like delivery and catering to other Italian companies. The Hover’s Mitsubishi-built engine is fuel efficient and will offer the option of shifting from gasoline to liquid propane gas in future models.

“I’m convinced it will be a winner,” he said.
(C)NYT

Fiat unveils 'The iPod of cars'

It was the small car that could park in the tightest of spots on the piazza, as Italian as prosciutto and espresso. On its 50th birthday, the Cinquecento is back, and Fiat wants it to become the iPod of cars.

Fiat launched a new version of the three-door Cinquecento - meaning "500" in Italian - at a huge, televised ceremony in its hometown of Turin on Wednesday, with the car making its comeback after being out of production for 32 years.

Slightly bigger than the original, it is part of the aim of Fiat's chief executive to emulate Apple by making its cars as stylish as the U.S. company's computers and electronic gadgets, including the iPod portable music player.

"I want Fiat to become the Apple of cars," Sergio Marchionne told La Stampa daily in an interview on Wednesday.

"And the Cinquecento will be our iPod," he added, referring to the hugely successful music player.

Like the Mini or the Volkswagen Beetle, the Cinquecento is an icon.

For Italians, it epitomizes the economic boom that their country enjoyed after the Second World War.

Cheap and efficient, it gradually replaced the scooter for millions of people whose living standards improved dramatically during the 1950s and 1960s.

After 18 years on the road, the Cinquecento went out of production in 1975.

But it still putters along the streets of European cities and elsewhere, thanks to its aficionados who have kept its spirit alive.

Fans descend on Turin
Members of Cinquecento clubs from across Europe and beyond descended in their hundreds on Turin on Wednesday to take part in the festivities ahead of the evening launch.

Many were optimistic about its prospects despite the variety of choice on the road, whether it be a Smart by DaimlerChrysler or Renault's new Twingo.

"The new one will sell really well," said James Wheeler, who traveled from Newbury, England with his blue 1959 model.

"I like cars that have passion," he said. "(And the new one) will definitely have passion."

Marchionne said he was working to make Fiat a nimble automaker after spending years restructuring it.

Part of that nimbleness was exemplified in the time it took to bring the new model to market: 18 months.

"It's twice the time for a child to be born but half of what our competitors need (to make their cars)," he said.

Faithful to the spirit of the original, the new Cinquecento will sell as a mass-market - rather than a premium - car.

Italian newspapers say it will be priced at about €10,000, or $13,600.

Fiat said last week that orders for the car had already exceeded half of the 50,000 it had planned to produce for 2007.

Such was the demand that it might raise its annual production target to 140,000 units from 120,000, it said.

Analysts expect the new model to help Fiat's image rather than its bottom line, saying the automaker had to succeed in expanding its Alfa Romeo and Lancia brands to make a difference for its future.
(C)CNN

Ranult Megane REAL Crash Test

New Nova is ready to go

Bold look for baby as it bids for same impact as Eighties legend.

It’s Vauxhall’s super-Nova! Now that the Corsa has grown up into a heavy­weight supermini, there’s a gap at the bottom of the Vauxhall range for a cheap, cheerful city car – and here it is!

These official pictures reveal the replacement for the Agila – a spiritual successor to the Nova. Com­parisons to the boxy outgoing machine are banished to the history books, as Vaux­hall brings its smallest model bang up to date. Just like the Nova did when it was first launched in 1983, the new Agila aims to rejuvenate the small car market.

With the Corsa, Peugeot 207 and Renault Clio all bigger than their predecessors, buyers who want a cheap four-door are having to turn to budget marques for affordable transport. And that’s where the new Agila comes in, with prices starting at around £7,000. Based on a Suzuki platform and built at the Japanese firm’s Hungarian factory, the Agila will share most of its parts with the new Splash.

The Agila is longer than its predecessor, but not as tall. The front end benefits from a mature look, with a V-grille flanked by large headlights and unique chrome-trimmed foglamps. Designers have saved their most distinctive lines for the rear, where an angular tail incorporates a near-vertical screen. This is reflected in the lamps, which have an unusual upright shape.

The five-seater’s interior is less imaginative. So far, Vauxhall has only released one image of the dashboard, but the sole flourish seems to be a Smart-style rev counter pod outside of the normal instrument binnacle. Other elements have a more conservative appearance, while buyers will get a choice of dashtop colours in addition to the blue pictured.

What the Agila lacks is any innovative sliding rear seats to make the most of the available space. Instead, the conventional rear bench can fold to leave a 1,150-litre capacity. Due to its Suzuki engineering, the Agila will be offered with two of the firm’s new petrol engines: a 1.0-litre 64bhp three-cylinder and a 1.2-litre 85bhp four-cylinder unit. A five-speed manual box is standard, but buyers of the 1.2 also have the option of an auto.

Vauxhall will take care of diesel power, with its new 74bhp 1.3-litre oil-burner. As Auto Express reported in Issue 960, the CDTI engine is also to be introduced in the Corsa, and has CO2 emissions below 120g/km, which will make the Agila eligible for emissions-based tax breaks.

With development work carried out in Japan and Europe, the newcomer’s chassis has been tuned to deliver excellent refinement and comfort. To help owners avoid accidents, ESP stab­ility control will be available, albeit only as an option.

The Agila will make its debut at the Frankfurt Motor Show in September, before going on sale in the UK in the spring of 2008.
By Chris Thorp