TURIN – For the new 500 minicar debuting today, Fiat is copying BMW's pricing strategy for its Mini.

Prices for the 500 will begin at 10,500 euros for the Pop trim level with a 69hp 1.2-liter gasoline engine, Fiat says.

The more powerful gasoline version, the 100hp 1.4-liter and the 75hp 1.3-liter diesel is priced at 12,500 euros.

Pricing in Italy is crucial for the success of any minicar in Europe. Of 992,227 minicars sold in western Europe last year, 340,306 were sold in Italy, JATO Dynamics estimates.

Germany, Europe's largest market with roughly 50 percent more sales than Italy, absorbs less than half that many minicars: 165,053 units last year.

Europe's best selling minicar is by far the Fiat Panda, which sold 231,051 units last year, more than twice its closest rival, the Toyota Aygo at 96,235 units.

Despite being marginally bigger and with two more doors (five instead of three), the Panda is much cheaper than the premium priced new 500. The entry 1.1-liter gasoline Panda starts at 8,770 euros in Italy.

ENLARGE The new Fiat 500

"Fiat's new 500 is an interesting concept," said Max Warburton, head of European automotive research at UBS in London. "The success of the Mini suggests there is a market for deliberately retro, nostalgic small cars and customers will pay a premium price."

Fiat plans to build 58,000 units of the 500 this year and 120,000 units in 2008.

The 500 is the successor to Fiat's iconic 500 minicar originally launched in 1957.

The new 500 is based on Fiat's so-called Mini platform introduced with the Fiat Panda in 2003.

The new 500 and the second-generation Ford Ka due late next year share a complete platform, suspension and powertrain. Ford styled the Ka in-house, while Fiat is responsible for the Ka's product and process engineering and for its production in Tychy, Poland.

Fiat plans to sell 58,000 units of the new 500 this year, reaching full capacity of 120,000 units in 2008.

Interviewed by Automotive News Europe in November, Fiat group CEO Sergio Marchionne said 500 production could be expanded "to 160,000 units easily, to 180,000 units with minimal investment."

You may e-mail Luca Ciferri at lciferri@craincom.de