Price and equipmentTHE FIAT Panda is $3000 too expensive in Australia.

Created for the cheap end of the new-car market, the Italian-made city car in base Pop guise starts from $16,500 driveaway – hardly a bargain when the similar Mitsubishi Mirage (from $12,990), Holden Barina Spark (from $12,490), and Suzuki Alto (from $11,790) are cheaper – even before on-road costs are factored in.

Even ruling out these contenders on the grounds they are about as hip as planking, the Panda’s Euro enemy – the VW Up – is $15,000 driveaway for the five-door equivalent, or a grand less if you don’t need the rear doors.

And in the three-door sphere the popular Fiat 500 Pop – which donates its diminutive platform – is $2500 cheaper too, reversing the order in Europe, where the Panda retails for around 15 per cent less.

Meanwhile the larger Fiat Punto is $16,000 driveaway… it just doesn’t add up.

And that’s a crying shame, because the Panda is one likeable runabout.

But consider this. Assuming you haggle really hard – and we saw some dealers do a Panda Pop 1.2 for $14,500 driveaway just prior to Christmas – then the Fiat stands a chance.

The model we’re testing here by far the most intriguing – the Easy TwinAir manual – with two cylinders, a turbo and a five-speed gearbox.

It kicks off from a whopping $19,000 plus on-road costs, which puts it in VW Polo 77TSI territory despite being from an entire class below.

Furthermore, you do not get cruise control, a driver’s seat height adjuster, front-seat map pockets, alloy wheels, rear disc brakes or even rear power windows, eroding the Panda’s value quotient even more.

But Fiat does include electronic stability control with anti-lock brakes and Brake Assist, hill start assist, six airbags, and anti-whiplash front seat headrests.

You’ll also find Fiat’s ‘Blue&Me’ Bluetooth telephone connectivity system with USB-audio and steering-wheel mounted voice-activated controls, a docking port that is ready to integrate with an optional navigation device, air-conditioning, front powered windows, remote central locking, daytime running lights, rear parking sensors, idle-stop engine idle tech, rear overhead grab handles, a sunglasses holder and roof rails.

What we have here, then folks, is the classic ‘is less more?’ scenario.

InteriorIf you like squares with rounded edges (dubbed ‘Squircles’ in Fiat-speak) you’ll love the Panda.It’s the standout motif for the third-generation model, released in Europe in late 2011.

One of the key changes over the previous Panda II available elsewhere from 2003 was a widening of the cabin, making the newcomer a five instead of four-seater like most sub-B segment cars are.

And the reality is that this actually suffices as a 4+1 seater – the middle rear is best for shorter folk. But there’s tonnes of headroom, reasonable shoulder space, and feet can easily tuck under the front seats if need be. Rear passengers are also perched up higher, further highlighting the light and airy cabin feel from back there.

Brandishing almost unfashionably deep side windows including a Squircle-shaped C-pillar port hole, the Fiat’s side and rear vision are exemplary, and such a refreshing change in a modern city car. Bravo, Turin. Brilliant.

The Panda’s dashboard is as interesting as the exterior, with our example finished in attractive Panda-inspired black and white two-tone hues.

Analogue meets digital within a trio of instrument binnacles that reminds us of the HQ Holden’s – except for the messy trip computer readout for the central one.

The driving position is a bit awkward for your 178cm tall tester – the footrest is too high while the (fixed height) seat and (tilt-only) wheel relationship is not quite right. Others, however, have no such quibbles, so try before you buy.

Anyway, all five seats are a bit flat but ultimately comfortable enough for short-haul journeys, there are heaps of storage places, the glovebox is satisfyingly deep, and the ventilation system managed to keep the car cool in 41ºC outside temperatures.

Details we like include the aircraft-throttle lever-style handbrake, removable GPS unit (as per the VW Up’s), and – for the sake of making a point – the beautifully deep glass area that makes parking and manoeuvring a breeze, while the dash-mounted power window switches, no rear armrest, and of course the missing cruise control in a $20K baby rile.

Speaking of babies, the boot is deep and wide but shallow, so you’ll never get anything like a stroller in there despite the provision of both ISOFIX latches and child-seat hooks within the rear-seat backrest.

Talking figures now, luggage capacity varies between 225 litres with the rear split/fold seatback erect, to 870L up to the front seat backs folded. Aiding capacity is a space-saver spare wheel.

But the really impressive figures lay at the opposite end of the Panda Easy TwinAir.

Engine and transmissionThe first thing you need to know is that Fiat’s international award-winning TwinAir is one of the most technically interesting, efficient and rewarding engines devised in the 21st century.

Secondly, it makes a “blaaaart/blaaaaaaaaart/blaaaaaaaaaaaart” noise that might sound odd at first, but is in fact just the twin cylinders pulling the rest of the car along, backed up by a turbocharger.

The upshot is this mind-blowing 875cc marvel punches well above its size and weight, delivering 63kW of power at 5500rpm and 145Nm of torque at 1900rpm.

Considering these figures, the Panda TwinAir’s official 4.2L/100km and 99g/km CO2 emissions rating is nothing short of remarkable.

The Italians fit idle-stop tech, which sometimes is a bit slow in firing the car up quickly enough we found that keeping the clutch pedal pressed down will keep the engine running when you only have moments to move in heavy traffic.

Alternatively there’s also an on/off switch too.

Thanks to short gearing, the Fiat leaps off the line, and just keeps powering on until the 6500rpm red line limit is reached (all too quickly), requiring an upshift. Driven like this, the Panda feels a bit like a hot hatch, zipping along with an eagerness and attitude of a much larger little car.

On the highway, there’s a hint of two-pot drone with the engine ticking over at a tad over 2600rpm at 100km/h, but in fact the TwinAir’s astonishing liveliness and pep alone makes its premium almost worthwhile.

By the way, the five-speed gearshift quality is OK – not great in the way that a Ford’s tight manual is – but better than Fiat’s own at-times sluggish and laggy Dualogic semi-automatic robotised transmission, which is best avoided.

Ride and handlingFiat recognises the city car formula better than most: diminutive proportions, plus sharp steering, plus comfy ride, plus torquey engine, plus instantaneous brakes equals brilliant runabout. Aiding its urban duties is its ‘City Mode’ electric power steering, allowing the driver to take all the weight out of the helm for easy wheel twirling.

Despite its tallness and a propensity for leaning, the Panda handles and corners very confidently, thanks to direct steering and unexpectedly strong grip from the Easy’s 175/65 R14 rubber.

We even had the opportunity to test the Fiat at Holden’s Lang Lang proving ground, where at speeds in excess of 130km/h, the little Italian hatch hung on through the tight turns and fast open corners with entertaining tenacity.

And true to form, the suspension soaks up bumps big and small with no sweat, while the brakes bite with reassuring conviction.

Add fantastic all-round vision, the golden silence of idle-stop and lane-loving skinniness, and you can see why Europeans love the Panda so much.

Safety and servicing Fiat does not offer any form of fixed or capped-price servicing.

Panda’s just been awarded a five-star ENCAP crash-test rating.

Verdict We’re so happy the Panda has finally made it to Australia after 33 years.

Nobody exposed to Italy’s favourite can grow tired of its capability, character and colour.

But who’s going to pay $19,000 plus on roads for a sub Nissan Micra-sized hatch without cruise control? Yes, the TwinAir is truly a revolutionary powerplant worthy of a premium, but Fiat’s positioning just serves to undermine its value.

Bottom line then: while we really want this vibrant urban runabout to succeed in Australia, it’s just too expensive.

Mind you, if you don’t mind paying more, and value second-to-none efficiency, uniqueness, charm and competence, then by all means sign up for the Panda Easy TwinAir right now.

It’s a fabulous little machine.

RivalsVolkswagen Up (from $13,990).

There’s little doubt in our minds this is the best sub-B segment city car in the world, bringing VW Golf values to the bottom end of the market. And now it’s even priced right. Aussies – stop ignoring the Up!Fiat 500 Pop (from $14,000 driveaway).

One of the world’ great bargains, the base 1.2-litre four-pot Pop is probably cheaper in Oz than anywhere else on the planet. And – bad driving position aside – it barely puts a foot wrong. Gorgeous!Nissan Micra ST (from $13,490).

Roomy, robust and with a rorty three-cylinder powerplant, the latest Micra makes a decent entry-level five-seater city car proposition – just bring your ear plugs and don’t mind the nasty plastics.

SpecsMAKE/MODEL: Fiat 319 Panda Easy 0.9L TwinAir ENGINE: 875cc 2-cyl turbo petrol
LAYOUT: FWD, transverse
POWER: 63kW @ 5500rpm
TORQUE: 145Nm @ 1900rpm
TRANSMISSION: 5-spd man
0-100km: 14.9s
TOP SPEED: 172km/h
FUEL: 4.2L/100km
CO2: 99g/km
L/W/H/W’BASE: 3653/1643/1551/2300mm
WEIGHT: 985kg
SUSPENSION f/r: Struts/Torsion beam
STEERING: Electric rack and pinion
BRAKES f/r: Discs/drums
PRICE: From $19,000 plus on-roads