Buoyed by the initial sales success of its new 500 model Fiat is now seriously considering an ambitious plunge into the minicar segment with a genuine low-cost urban transport vehicle solution which would go head-to-head with the forthcoming Toyota Endo as well as targeting the market share currently occupied by the Smart ForTwo. It's dimensions and packaging Fiat hope would effectively address rapidly-changing urban requirements, be easy to park, and able to operate at ease in the most congested city environments.

The amazing initial success of the 500 returned Fiat firmly to its roots of building practical and innovative and stylish 'city' cars. The 500, which "re-launched the Fiat brand" in the words of its senior management, has seen 60,000 orders taken during the first month it has been on sale and already prompted annual production targets to be revised upwards. Now Fiat is hatching plans to roll out more small cars, though these will be practical rather than in the more fashionable 'lifestyle' mould of the 500. It will soon be a crowded segment as a string of other manufacturers have projects underway.

Two new products are already making their way down the Fiat pipeline. A new "low-B segment" hatchback, which will revive the Uno name and replace the old-generation Punto which is still being built in Italy as a B-segment entry-level contender, and the Palio, a car sold in this category in emerging markets worldwide for more than a decade. Fiat Brazil is leading the development of new Uno project and it is set to hit the global markets in 2009. The new Uno is expected to be based on the Grande Punto's architecture, but its 4.03 metre length will be shortened to around 3.8 metres. Prices will range from 11,000 to 14,000 euros.

The second low cost vehicle under development is a light commercial vehicle to be built by Tofas at its Bursa plant in Turkey, code named Minicargo; leading French carmaker PSA Peugeot-Citroen is also a partner in the project. Aiming to build on the success of the larger Doblò, which is cheap to produce and also built in Turkey, the Minicargo will feature a useful and versatile passenger carrying version, the Panorama. The Minicargo is set to revive the Fiorino name, and will be introduced at the upcoming BedrijfsautoRAI. Production is slated at 135,000 units per year, with 2/3 of production destined for PSA Peugeot / Citroen and 1/3 for Fiat.
 
Now Fiat is actively considering the merits of a smaller, genuine 'city car' project. Fiat CEO Sergio Marchionne is reportedly very keen to see a less than 3 metre long model added to the Turin firm's growing model range, and a car which would take the up the 'baton' of the 500 project and set further bold new standards for innovation, engineering and and compact packaging. This proposed vehicle would be the perfect recipient for the new 900cc 2-cylinder turbo engine, code named 'Small Gasoline Engine' (SGE).
 

This engine is currently in the final stages of development by Fiat Powertrain Technologies, and is set to make its debut in 2009. Through the incorporation of Multiair technology and a small turbocharger it will offer a punchy 90-110 bhp. This highly compact but very capable unit could be packaged at the rear of the minicar, allowing its length to be kept to around 2.75 metres, although this solution is considered unlikely. Fiat also believe that furthering the use of the stronger construction materials (which will allow the 500 to achieve a 5-star Euro NCAP rating without compromising its interior space) can also be applied to this car.

Fiat's Turin-based research division, CRF, has undertaken several small car category projects in recent years, including one which sees the vehicle able to be compacted by the driver when required to do so to further reduce its dimensions and use of space. Fiat has also been supplying engineering input to a new ultra low cost car being developed by its Indian joint-venture partner Tata Motors, a project which is imminently to be realised.

Competitors for this proposed new Fiat minicar, which will reach the market in 2010 if the project is given the green light, would be the higher-priced Smart ForTwo, but more importantly the Toyota Endo project, which debuted in concept form at the last Frankfurt Motor Show and which is set to be presented in full production specification next year. Mr Marchionne is rumoured to be concerned at the impact that the production Endo (which is expected to be very similar to the concept) will have on the European markets and is keen to quickly counter this perceived threat. The Endo incorporates a host of innovate solutions in its chunky frame, including its large-hinged wide-opening doors, a wrap round windscreen, vertical tailgate, a flat dashboard and three adult seats plus a small folding one suitable for a child, the latter space solution of a generally similar format to one pioneered by Fiat on its Trepiùno concept car of 2004 which featured an innovative 3+1 seating arrangement, and a prototype that in fact gave birth to the 500 project.

Other manufacturers such as Volkswagen are also developing entry-level cars, with the German carmaker in particular focusing on a new rear-engined design. Industry professionals in close working relationship on Fiat projects strongly believe that very soon we will see a real rebirth of cheap cars on the market, priced at around 5,000 euros.