FIFTY years ago in Italy, a diminutive car with an equally tiny 500cc engine at the back was introduced to the masses. The Cinquecento - Italian for 500 - quickly proved to be practical and popular, becoming a national icon.

Production of the original may have ended more than 30 years ago, but like the New Beetle and BMW's Mini, it has been revived and reinvented as the Fiat 500. Today's 500 has retro styling but the engine is now in front because it is based on a Fiat Panda platform, modified for ergonomics and safety.

This also means the 500 is also slightly bigger, with all the creature comforts and trendy details expected of a modern vehicle. Like a USB connection for an iPod or mobile phone, and a multi-function steering wheel.

But perhaps the biggest improvement of all is that the car is well-made. At first glance, the build quality of this little Fiat comes close to the high standard of a Japanese-made car. Its operation also feels similar, with light controls and a smooth ride.

Yet the 500 possesses that characteristic Italian style and attitude. Some cool features include the body coloured dashboard and eye-catching meters. If more 'character' is required, there are myriad customisation possibilities thanks to the numerous paintwork, interior colour and accessory choices.

Very un-Italian, however, is the car's handling, which is neutral. It is thoroughly competent but not quite fun to drive. The steering feels too light at high speed although the term 'high speed' has to be qualified, given the mere 69 hp of the 1.2-litre engine.

But it is very economical (kerb weight is just 865 kg), and Fiat claims it can travel as much as 18 km per litre.

To its credit, the power plant doesn't sound anaemic. It revs sportily and rarely feels strained. The five-speed clutchless manual Dualogic transmission - with a very nice chrome gearlever - also helps exploit every single hp available.

Later this month, a twin-cam 1.4-litre engine with 100 hp will be available. That unit is a lot more enthusiastic and even comes with a 'Sport' mode to quicken engine response. But it will cost $10,000 on top of the $79,900 for the 1.2 Dualogic.

And that is perhaps the main drawback of the Fiat 500. It is possible to overlook the small back seat and miniscule boot. But its price is something else, even though it has a high level of equipment.

This European mini comes standard with a panoramic glass roof with retractable sunblind, City mode for lighter, parking-friendly steering, and seven airbags, including a driver's knee airbag (the little 500 actually has the maximum five-star Euro NCAP crash safety rating - unusual for a car its size).

As a car, it may be a bit extravagant. But as the latest Italian fashion accessory, it could be the perfect number.

Fiat 500

Engine: 1,242cc
Gearbox: 5-speed manual or 5-speed Dualogic transmission
Max power: 69 hp @ 5,500 rpm
Max torque: 102 Nm @ 3,000 rpm
0-100 kmh: 12.9 secs
Top speed: 160 kmh
Price: from $76,900 (with COE)
Distributor: TTS Eurocars, tel 6842-2222