Reinvented Fiat 500 icon will undercut its chief rival, the MINI One
It’s here! The first Fiat 500 has hit the UK, and when we took it out to gauge public reaction, the car was mobbed by excited onlookers. This response will worry MINI – especially as we can exclusively reveal that the Italian model’s price will be far lower than expected.

While pre-launch speculation suggested entry-level cars would cost from £12,500 when they arrive here early next year, we’ve learned that the true figure is likely to be around the £11,000 mark. Importantly, this means the 500 will undercut the 1.4-litre MINI One by £610.

Prices for other models in the line-up have still to be discussed, although top-of-the-range variants are tipped to cost around £13,000.

Whatever the pricing structure, Fiat dealers’ big challenge will be actually getting hold of the 500. Our sources claim the firm has sold nearly all its allocation for the first year of production – so anyone placing an order now won’t see their 500 until summer 2008 at the earliest.

However, a deal Fiat has agreed with Chinese maker Chery could ease that problem in future. The companies have a signed a memorandum of understanding, which underlines their intention to work together to bring Alfa Romeo and then Fiat to the Chinese market – and possibly to build cars that could be exported elsewhere.

The first of these will be produced in 2009, with Chery expected to make 175,000 units a year – including Alfa’s 159 and five-door 147.