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The 500’s new, 875cc, Stop/Start-equipped TwinAir is the first Fiat Group engine to be developed from scratch using Fiat’s excellent new MultiAir intake valve technology and its two, petrol-fuelled, turbocharged cylinders produce a healthy 85hp at 5,500rpm along with a very useful 145Nm (107lb/ft) of torque at just 1,900rpm. (Power is slightly reduced when in selectable Eco mode.) Although it doesn’t rev highly, the 500 is both small and light, so the TwinAir has more than ample get-up-and-go, either around town or on the open road. Due to clever internal balancing the engine is impressively smooth, and it has a slightly gruff but characterful engine note. A less powerful non-turbo version and a more powerful turbo version will come to market in due course, as will a semi-auto Dualogic, but for the time being the figures for the 5-speed manual are: 0-62 in 11 secs with a 108mph max.

The TwinAir 500’s diminutive engine is around 23% shorter and 10% lighter than the existing 4-cyl 500 motors, and with revised suspension to suit, this can only benefit the new model’s ride and handling. Being short and light the car changes direction rapidly and it’s a joy to drive around town. With a comfortable ride it has good composure even when driven on cobbles and tramlines, and maintains big-car surefootedness on faster rural roads and motorways. The 500 also displays minimal body roll with ample grip, but if bullied into a tight corner there can be a predictable whiff of manageable understeer.

Fiat’s breakthrough MultiAir technology has been reliably employed on other Fiat and Alfa models since early 2010, and with this new 500 having just two cylinders (plus about £300m of Fiat’s cash invested in its development) there’s theoretically much less to go wrong. The new model will be available (in UK from Sept 2010) as either a hardtop or convertible and, as the 500C retains the hardtop’s door pillars and roof frame, it also retains pretty much all of the hardtop 500’s body rigidity. The 500 is based largely on the tried-and-tested Panda, which itself came second in the City Car segment of JD Power’s 2010 customer satisfaction survey. More subjectively, the 500 seems solidly built and is exquisitely finished with attractive, high-quality materials and lovely design and detailing inside and out.

The current 500 was the first car under 4-metres in length to win the full five stars in the Euro NCAP crash tests, and the new TwinAir retains all the safety components and features (active and passive) that place it among the best in class. Seven airbags come as standard plus there’s ABS with EBD, ESP, ASR, a hill-holder system which helps with hill starts, and HBA (Hydraulic Brake Assist) to help with emergency stops. The front seatbelts have dual pretensioners and load limiters while front and rear seats have an anti-submarining system. There’s also remote central locking, a locking filler cap and an immobiliser. (An alarm will likely be a dealer-fit option.)

The TwinAir’s engine is smaller, and consequently has different engine mountings and retuned suspension, but in other respects it’s pretty much identical to existing 500 models and so has the same interior space, equipment and luggage capacities – 185-litres (hardtop), 182-litres (Convertible). Whether 500 or 500C, all 500s are cosy but far from cramped in the front, and cosier in the rear but still not cramped for a car of this size.

Although having performance comparable with the existing 4-cyl 1.4-litre petrol model, and better than the 1.3 MultiJet 500’s, the new 0.9-litre TwinAir 500 beats them both on emissions and fuel consumption: 69mpg combined and 95g/km (or 92g/km with the forthcoming Dualogic transmission). This compares with the 1.4’s 46.3mpg/140g/km and the 1.3’s 67.3mpg/110g/km. Being under 100g/km this of course means zero road tax for the TwinAir as well as further reduced running costs in other areas. That 95g/km figure also makes the TwinAir the world’s greenest non-hybrid petrol-engined car, (by 4g/km at the time of writing). UK TwinAir prices have yet to be announced, but starting at around £11,000 shouldn’t be too far out.

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