Fiat wants Cinquecento to be the iPod of cars

By Gilles Castonguay

TURIN, Italy (Reuters) - 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 aim to emulate Apple 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.