The new 500 was born out of Fiat Auto’s avoidance of a near death experience in the early part of the C21st. Just after the turn of the century Fiat SpA the giant industrial conglomerate that included Fiat Auto, was in serious financial trouble. The Auto division had suffered a run of poorly received new cars, such as the lack luster Stilo, and was losing market share across Europe. To help the turnaround, Fiat SpA signed a joint venture with General Motors to develop a new supermini. The deal allowed Fiat SpA to force GM to take over Fiat Auto by 2004, which gave some idea how even its parent company thought the venerable brand was close to collapsing. Meanwhile, Fiat had gone back to basics in an attempt to revive itself. In 2000, under its own stream, it started work on a brand new city car project. The Fiat Panda was built on a brand new platform and was designed to replace the original, much loved and long lived Panda. As the development of the Panda was winding down in 2003, Fiat bosses gave a green light to the idea of reviving another icon. The classic 500 model was probably more of a cultural institution than a mere consumer durable.
Partly inspired by the success of the Mini, the new 500 was based on the Panda chassis and styled under the direction of Frank Stephenson (who, ironically, was also responsible for the New Mini). It was universally regarded as a triumph, especially the 1950’s inspired interior, which owed little to the original, more Spartan 500. The new 500 was launched in 2007, with a sporting Arbarth version launched in early 2008 and a promise of a cabriolet version later the same year.
