Europeans expect subcompact cars to be cheap and affordable. While it seemed like BMW would be the only company to be able to justify a premium price for its MINI cars, Fiat seems to think it can also charge a high-price for its new 500. Yesterday it officially launched its Fiat 500 copying BMW’s premium pricing strategy.

Prices will begin at 10,500 euros ($14,275) for the 1.2 lite 8v producing 69 horsepower. Pricing for the 1.2 liter diesel producing 75 horsepower and the 1.4 liter gasoline engine producing 100 horsepower will begin at 12,500 euros ($16,994).

“Fiat’s new 500 is an interesting concept,” Max Warburton, head of European automotive research at UBS in London, told Automotive News. “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 minicar this year and 120,000 units in 2008.

2008 Fiat 500 Gallery:

Source: Automotive News (Subscription Required)

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