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David Yoder for The New York Times
By JOHN TAGLIABUE
Published: August 11, 2007
TURIN, Italy, July 26 — 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.”
The original Fiat 500, or Cinquecento, left, next to the revamped 500 introduced in July. In Italy, Fiat’s advertisements for the car appeal to patriotism.
