Fiat wants Cinquecento to be the iPod of cars
By Gilles Castonguay
Italy's Fiat unveiled a new version of the Cinquecento at a big, televised event in its hometown on Wednesday, marking the return of the tiny, iconic car after being out of production for 32 years.
Slightly bigger than the original, it is part of Fiat's (FIA.MI) aim to emulate Apple (Nasdaq:AAPL - news) by being nimble in its execution and by making cars as stylish as the U.S. company's computers and electronic gadgets.
"I want Fiat to become the Apple of cars," Chief Executive Sergio Marchionne told La Stampa daily in an interview published early in the day.
"And the Cinquecento will be our iPod," he added, referring to the hugely successful portable music player.
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 euros ($13,600).
BETTER THAN NORMAL
Speaking after the event where U.S. singer Lauryn Hill performed, Marchionne told Reuters he expected to get a profit margin that was "better than normal" from the sale of the car.
He declined to specify ahead of Thursday's news conference.
Margins for the small car segment of the market are very small, sometimes going upwards to about 3 percent.
Fiat has said orders had already exceeded half of the 50,000 it had planned to produce for 2007, forcing it to consider raising its annual target to 140,000 units from 120,000.
Analysts expect the car 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 real difference for its future.
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 Cinquecento 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.
Like the Mini or the Volkswagen (VOWG.DE) 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 -- meaning "500" in Italian -- went out of production in 1975.
But it still putters along the streets of Europe, thanks to the enthusiasm of car collectors.
Hundreds of members of Cinquecento clubs from across Europe arrived in Turin to take part in the festivities ahead of the launch, which took place on the car's 50th birthday.
Many were optimistic about its prospects despite the variety of choice on the road, whether it be a two-seater Smart by DaimlerChrysler (DCXGn.DE) or Renault's (RENA.PA) 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."