The award winning Fiat 500 (top) will be the first recipient of the new hybrid system when it widens its engine range after receiving the new bi-cylinder 900cc SGE [Small Gasoline Engine]. Meanwhile, set to be unveiled at the Geneva Motor Show next spring, is the Topolino (bottom).

Fiat is set to push the technological boundaries forward once more as it plans to unveil a new hybrid system that will set new standards for its compactness. It will power the best-selling small Fiat 500 as well as its forthcoming tiny urban car dubbed the 'Topolino' and will miniaturise this fuel saving process in a way that its marketplace rivals haven't been able to achieve so far. The news comes in the latest edition of Italian magazine Quattroruote.

The Car of the Year 2008 award winning Fiat 500 will be the first recipient of this innovative new hybrid system when it widens its engine range in the showrooms after receiving the new bi-cylinder 900cc SGE [Small Gasoline Engine]. Meanwhile, set to be unveiled at the 80th Geneva International Motor Show next spring, is the exciting 'Topolino' which will be based on a shortened version of Fiat's "Mini" architecture, currently used to underpin the Panda and 500 as well as Ford's new Ka. It too is schedule to be fitted with the new hybrid powertrain. Just 3.15 metres long the Topolino (which revives a famous historical Fiat designation) will be designed in house by Centro Stile Fiat while power will also come from the new SGE engine which will be innovatively packaged to maximise interior space.

This all-new hybrid system is apparently at a very advanced stage of development by Fiat Powertrain Technologies (FPT) and according to Quattroruote it will also be swiftly made available to potential alliance partner Chrysler and will feature in its stateside vehicles. Little detail has been revealed but it is known that it will be based around an innovative new double clutch system that incorporates a compact electric motor. New-generation lithium-ion batteries that will be able to be packaged with minimal loss of space, and plug-in recharging facility will complete the key components.

By introducing this hybrid system to the 500 and Topolino Fiat will be setting new benchmarks in making the hybrid technology useable in a compact format. The current hybrid market leader is Toyota's Prius. A large C-segment hatchback, the next-generation version, while retaining broadly similar dimensions, is set to be fitted with a bigger 1.8-litre engine. It is due in the showrooms next month and will retain the current model's nickel-metal battery pack. Meanwhile the latest entrant into the hard-fought hybrid sector is Honda's Insight. Broadly similar to the Prius it is a mid-sized C-segment hatchback. Other popular hybrids such as the Lexus Hybrid and Ford Escape Hybrid are considerably larger.