Ever-tighter fuel economy and emissions regs, not to mention changing consumer tastes, have automakers doing more with less. We’re seeing a resurgence in compacts and subcompacts, and automakers are putting smaller, more efficient engines in many models. But Fiat is taking it to a whole ‘nother level by putting a tiny two-cylinder engine in the adorable 500.

Fiat says the TwinAir 875cc will be the world’s most fuel-efficient gasoline automobile engine — getting 57.4 mpg — when it appears in the 500 this fall. It meets Euro 5 emission regs and will allow Fiat to retain its position as the European automaker with the lowest overall fleet CO2 emissions.

“We have no intention of relinquishing our crown of Europe’s greenest automaker and the TwinAir engine will have a crucial role in maintaining our lead,” Alfredo Altavilla, Fiat vice president for business development, told Automotive News Europe.

It also brings the 500 closer to its roots, because the original Cinquecento used a two-cylinder engine, as did other microcars in post-war Europe. But don’t think Fiat’s gone all retro with the tiny engine. It’s thoroughly modern, and it sounds like an impressive bit of kit.

The parallel twin uses four valves per cylinder. Electro-hydraulic intake valves with variable timing in place of a conventional camshaft allow more precise combustion, increasing fuel economy and torque. Fitted with a tiny turbocharger, the TwinAir produces 85 horsepower and 106 pound feet of torque. An “eco” mode cuts that to 73 pound feet to boost fuel economy further. The engine also has stop-start technology.

Auto Express spent some time behind the wheel of a TwinAir 500 and came away impressed. The engine feels a lot like a four-banger below 2,500 rpm and has good pull in part because the transmission has short gearing. Wind the little engine that could up and it sounds like a motorcycle — not at all surprising, given the engine is actually smaller than those in many bikes. A counterbalancer keeps things smooth, and Auto Express says the TwinAir performs a lot like a 1.4-liter four.

Fiat says the TwinAir will do zero to 100 km/hr in 11 seconds and top out at 107 mph.

Bolted to a semi-auto gearbox, the engine delivers a Prius-like 57.4 mpg and emits 92 g/km of CO2. The five-speed drops the figures to 54 mpg and 95 g/km, according to ANE. Fiat also will offer a non-turbo model good for 65 horsepower and a tuned turbo version good for 115.

A TwinAir 500 will go for $16,775 in Italy. No word on whether the engine will make it to this side of the Atlantic when the 500 arrives at the end of the year. The company also is planning a mild-hybrid drivetrain using the engine.

Photos: Fiat

See Also:

• Small Is the New Big at Ford
• Mustang Makes ‘Big Statement’ With Power and MPG
• Feds Finalize New Fuel Standards To Save Oil, Cut Emissions
• Hallelujah! The Fiat 500 Is Coming!
• Electric Fiat 500: Bellissimo!

Isn’t it cute? TwinAir, by the numbers: One turbocharger, two cylinders, eight valves, 85 horsepower and 106 pound feet. And it gets 57.8 mpg.

And while all the big Western players unveiled new models or announced new production or joint ventures expansion deals at this year's Beijing show, Fiat keeps missing the boat on the largest new car market in the world.

Of the almost 14 million new vehicles made in China last year, Fiat manufactured zero, zilch, none. The Italian automaker hasn’t made a car in China since it stopped production there nearly two years ago, after it withdrew from its joint venture with local Nanjing Automotive following  years of sluggish sales.

Funnily enough, observers there cited many of Fiat’s China-market problems resemble those that have plagued troubled Chrysler: a slow response to customer need and lack of competitive product. In the eight-year relationship with nanjing, it only offered three aging models, changed presidents four times and replaced its sales and marketing chief seven times.

Just to be clear: Fiat still sells cars in China. It exports the Linea, Grande Punto and Bravo. But the numbers are downright microscopic. In 2009, sales were down 62.5 per cent, to just 454 units.

Compare that to General Motors and its joint ventures. They sold a record over-1.8 million vehicles in China in 2009. Volkswagen, over-1.4 million.

On the surface Fiat hasn’t given up on China. Although construction of a new plant started in November, there’s been no work since. And Fiat is still negotiating range of issues including new model introductions and the internal management.

If the Italian automaker can’t get its act together in China—a market that can balance out weaker sales in Europe and the U.S.—how can Fiat survive as a truly global automaker?

According to Bigland, the forthcoming  Fiat 500 city car, left, and its performance oriented Abarth model were big hits at last month’s Toronto auto show. As such, he thinks Chrysler partnering with Fiat, "fits like a glove."

As you may know, the  500 is expected to go on sale here early next year. Additional, yet-to-be-announced Fiat models are expected to appear in Canada after the 500's introduction to replace Chrysler’s current Dodge Caliber/Avenger, Chrysler Sebring and Jeep Compass/Patriot starting in 2012.

While most of today’s Chryslers are purchased because of their low pricing or generous incentives, refinement, reliability and quality aren’t part of the package.

In J.D. Power’s latest annual study of how well vehicles hold up after three years of ownership, all three Chrysler Group brands — Chrysler, Dodge and Jeep — fell in rank. Dodge and Jeep finished in the bottom third of the pack. And the 2009 Consumers Reports auto issue had Chrysler, Dodge and Jeep among the industry’s least reliable brands over the past 10 years.

However, based on Fiat’s current rankings, Canadians shouldn’t expect huge improvements. The ol’ Fix-It-Again-Tony joke still rings true for its current European models.

According to U.K.-based Which? (kind of a British Consumers Reports) Fiats and Alfa Romeos are near the bottom in reliability and “need to improve significantly to move way from the foot of table where they have languished for several years.”. While Brit magazine What Car? put Fiat 28th out of 28 brands in its 2008 Customer Satisfaction Index for two-year-old vehicles.

So do you think Chrysler Canada’s optimism for the new Fiat-based small cars is justified?

Will Canadians continue to buy Chryslers based on Fiat nuts and bolts?

[Source: Ward’s Automotive]

Hey! There are signs of life at Chrysler, which says an electric version of the Fiat 500 will roll silently into American showrooms in 2012.

Chrysler was long on promises and short on details today when it announced its engineers are developing an electric drivetrain for the car, which we loved as a concept (pictured) at the Detroit auto show in January. Of course, Chrysler offered no specifics, saying only that the car “is comprised of three main systems: high-power electric powertrain module, advanced lithium-ion battery and an EV control unit to manage power flows.”

Wow. Thanks for the EV Drivetrain 101 lesson, Chrysler.

Chrysler will do all the engineering for the vehicle at its HQ in Auburn, Hills, Michigan. BusinessWeek says Chrysler’s shooting for a range of 100 miles. The car will sport a Fiat nameplate, but Chrysler will build it specifically for the United States. No word on price, but Fiat and Chrysler capo Sergio Marchionne said in January the concept car would sell for $32,000 if it ever saw production, according to Automotive News Europe. He chalked up half of that to the battery.

No word on whether that price tag is before or after the $7,500 federal tax credit for EVs. Either way, 32 large is a lot to ask for a subcompact, especially since it almost certainly will be a two-seater like the Mini E (batteries eat up a lot of space. That’s the same ballpark the four-door Nissan Leaf EV is playing in. The car also will be coming to market at least a year behind the Leaf, the Chevrolet Volt and Ford’s electric Focus. On the other hand, the 500 has fantastic styling going for it.

Chrylser has teased us with electric vehicles before — anyone remember the ENVI skunkworks program and the cool Dodge Circuit EV we saw 18 months ago? But that was before Chrysler imploded and Fiat took over. Marchionne said in November that Chrysler would build 56,000 electric cars annually by 2014, and the two companies always have planned to raid Fiat’s stable to provide platforms for new Chryslers.

“The Fiat 500EV is an outstanding example of our efforts,” Scott Kunselman, senior VP of engineering, said in a statement. “The Fiat 500 is a small, lightweight platform perfect for integrating electric vehicle technology.”

The electric 500 will follow the conventional gasoline-powered model that will arrive in the United States at the end of the year.

Chrysler also said it’s killing its plan to build a hybrid Ram pickup — it couldn’t make a business case for it — but says it will develop 140 plug-in hybrid pickups for a three-year demonstration program. Chrysler has selected Electrovaya to provide the batteries.

UPDATED 2:50 p.m. Eastern March 24 to mention Chrysler decided to use Electrovaya batteries.

Photo of the 500EV concept at the Detroit auto show: Chuck Squatriglia / Wired.com More pix here.

It’s been a quiet few months for the U.S. automaker. Virtually taking the year off with no new models for 2010, Chrysler has had little or no presence on the auto show circuit. In fact, the new product tap has been virtually tuned off since the 2009 Journey, Challenger and Ram.

But last week, a puff of white smoke emanated from the Detroit automaker. Ralph Gilles, president and CEO of Dodge Car and senior vice president of Chrysler’s Product Design, presented a sketchy-looking teaser shot of a future, Fiat Punto-based Dodge subcompact hatch, above, during a Chicago auto show luncheon.

Trouble is, according to Fiat’s published product plans, the new Dodge subcompact isn’t due until 2013, giving fresh competition like the Ford Fiesta, Chevrolet Aveo, VW Polo and Mazda2 (plus the established Yaris/Fit/Accent/Versa clan) a couple of years head start in the marketplace.

Today, Chrysler has zero presence in the subcompact class. And although the Fiat 500 city car has been promised to be on sale in Canada by the end of this year, it’s a low-volume niche vehicle at best.

So what until 2013?

Fiat boss,, Sergio “The Don” Marchionne, has promised to “fix” the current bottom-feeder Chryslers, like the Dodge Caliber, Avenger and Chrysler Sebring, for the 2012 model year, and new versions of its big sedans and SUVs are on the way:

 “The first half of 2010 is going to be more difficult than the second, simply because the product offering doesn’t start delivering until the second half. The first real viable, tangible evidence of this is going to be the Grand Cherokee in [quarter two], which is brand new. Then we’re going to see the Wrangler coming out with a significant update. I think there are 14 other interventions, most of which are significant enough to warrant almost a new product launch – that will come out in [quarter three] or [quarter four] this year.”

For 2010, The Don has said Chrysler must sell 1.65 million vehicles worldwide to put the automaker in a "slightly positive" profit position, profit needed to re-pay government loans as he has promised.

That would mean about 1.1 million sales in the U.S. Trouble is, U.S. sales for January were down another 8 per cent compared with the same period last year; or about 685,000 annually. Not good.

Let’s face it: Sketches are cheap compared to real, new product development. So until Fiat does something tangible—like a competitive family sedan and crossover platform—its hard to fathom just what Fiat’s intentions are with the Chrysler and Dodge brands.

But with sales tracking at about half what is needed to stay alive, the numbers just don’t add up in The Don’s favour.

Do you think Chrysler can stay in business long enough to see these teaser shots become reality?

[Sources: Autobirdblog, The Chicago Sun Times, Edmund’s Auto Observer]

Yes! At long last, the awesome Fiat 500 will be here by the end of the year. Better still, it looks like we’re getting the super-hot Abarth 500 as well.

Ralph Gilles, v.p. of design for Chrysler, confirmed today that the retro-ride is headed to America three years after debuting in Europe. The comment came during a speech before the Chicago Economic Club in which Gilles called the 500 a symbol of how well the Fiat-Chrysler partnership is working out.

We weren’t in Chicago and Chrysler has not yet provided a transcript of the speech, but according to Motor Authority we’re getting four versions of the car — the three-door hatchback shown above, the 500C drop-top, a Giardinetta wagon and the souped-up Abarth 500. The Abarth gets a 135-horsepower turbocharged 1.4-liter engine. No word on what the other models will come with, but they’re offered with normally aspirated 1.2- and 1.4-liter gasoline engines and a 1.3-liter diesel.

The 500, which perfectly updates the adorable Cinquecento, could take a nice chunk of the market that’s gone to Mini. But it also could go after the Toyota Yaris and Honda Fit, Reid Bigland, president and CEO of Chrysler Canada, told Canadian Press today when the car was unveiled at the Canadian auto show.

Fiat has since June teased us with the promise of driving the 500 on this side of the Atlantic. According to Reuters, Fiat plans to start building the 500 in Toluca, Mexico in December.

Fiat CEO Sergio Marchionne wouldn’t say how many cars might be built but called 130,000 an ideal target for the United States and Latin America. Chrysler plans to more than double its sales, roll out a dozen models built on Fiat platforms and repay its loan to the federal government within five years. The 500 appears to be a cornerstone of that plan. “The 500 is expected to stir excitement and certainly will help us position the group in the forefront of the industry in terms of innovation and fuel efficiency,” Marchionne said, according to Reuters. (During his speech, Gilles said Chrysler will improve fuel economy 25 percent on average by 2014.)

Sergio, we love you. Now please greenlight the 500 EV.

UPDATE: 9:30 a.m. Feb. 12: Gilles didn’t say what the 500 might cost when it gets here, but for what it’s worth the car starts at £10,700 in the U.K. That comes to about $16,706 at today’s exchange rate. One reason Fiat is building the car in Mexico is to keep the price down when the car is introduced to North America.

Photo: Fiat