The Fiat 500 is the latest entry in the subcompact category, a market that has mushroomed in North America over the last couple of years, with Ford and Mazda adding their own. The 500 represents not only its Italian maker, but also Chrysler, whose partnership with Fiat was instrumental in bringing the 500 here in the first place. This car, as you see it here, has been on sale in Europe since 2007.

Presumably, you see it as the cutest thing on wheels, as many bystanders seem to. The 500’s styling is remarkably true to that of the original 1957 model, only bigger (believe it or not). That car was powered by a tiny two-cylinder, air-cooled motor mounted in back; like the Volkswagen New Beetle, the modern Fiat 500 moves its motor up front. In North America, that motor is a 1.4-litre four-cylinder that delivers 102 horsepower and 98 lb-ft of torque.

This is a car best suited to the city, where the engine’s robust mid-range torque makes for impressive acceleration at lower speeds. A five-speed manual gearbox is standard, but my test car had the optional six-speed automatic. It’s a good match for the engine, making the best of its power output and yet keeping the engine spinning at a relatively relaxed 2,500 rpm at 100 km/h. Its shifts could be smoother in moderate acceleration, but it responds well to flat-out running.

The 500’s European heritage suggests that it should be a sharp handler, and it is, but changes made for the North American market have likely softened the car’s suspension and perhaps its responses. Certainly, this isn’t the go-kart that the Mini Cooper is, but the 500’s short wheelbase, wheels-at-the-corners stance and lithe curb weight (1,104 kg/2,430 lbs with automatic transmission) make for a car that’s happy to be tossed around corners.

Road and engine noise are plentiful at highway speeds, and the car is blown around easily in crosswinds – this is not a long-distance cruiser for the faint of heart. When the weather’s not windy, this car tracks well and feels confident on the highway, but it really shines in the city, where it scoots through gaps in traffic and can be parallel-parked almost anywhere.

The short rear overhang makes backing up a cinch in the 500, so the Lounge model’s standard backup warning system seems unnecessary.

The 500’s Natural Resources Canada fuel consumption ratings are 6.7 L/100 km in city cycle testing and 5.1 L/100 km in the highway test (with manual transmission). With the automatic, consumption increases to 7.4 L/100 in the city and 5.7 on the highway – not bad, but many compacts, with both more power and refinement, can match my tester’s real-world performance of 8.1 L/100 km in around-town running.

Those similarly-efficient compacts have another edge on the 500, in interior space. This car is as tiny inside as its exterior suggests; just as carnival rides requires riders to meet a minimum height, this Fiat should come with a max height restriction. I’m five-foot-seven on a good day, and my head nearly touched the headliner even with the height-adjustable driver’s seat cranked down all the way. Part of this is to do with the upright front seating position, which feels more minivan than mini-car. The optional sunroof steals quite a bit of headroom; my top-line Lounge tester comes standard with a fixed glass roof, while lesser Pop and Sport trims have a regular steel top; either would probably make for more headroom. There’s a convertible model, too.

The steering wheel tilts but doesn’t telescope; I had to sit a little closer to the pedals than I’d have liked, for a comfortable reach to the wheel.

The Fiat’s back seat is small, being best-suited to kids or very short adults. Ironically, kids might not fit easily till they’ve grown up a bit, as a baby seat would be a squeeze behind the front seats. Predictably, the trunk is tiny too. Fiat claims a max of 850 litres (about 30 cu. ft.) of cargo space with the rear seats folded, and a lot less with the seatbacks in place.

Packed into that tiny interior is a load of style and (mostly) good fit and finish. The body colour-matched dash panel is sharp, as are the cream and red leather seats (leather is standard in the top-line Lounge model), which are quite comfortable for their small size. The rest of the interior is made up of nice-looking, but hard, black plastic befitting a subcompact in this price range. The misfit panels in my test car – in the dash and the interior trim around the back windows – were good reminders that as stylish as this car is, it’s still essentially an entry-level vehicle.

The Lounge model gets automatic climate control. Its buttons are big and easy to figure out, but the stereo’s controls – all buttons and no knobs – are less intuitive.

Fiat 500 pricing begins at $15,995 for the Pop model, which includes power windows, locks and keyless entry; air conditioning and Bluetooth are standard in the $18,500 Sport trim. The $19,500 Lounge trim includes leather, the glass roof, cruise control and upgraded stereo. The sunroof in my tester was is a $500 extra, and heated front seats added another $300.

As the current cute car du jour, the Fiat 500 boasts more head-turning horsepower than anything else on four wheels. It’s almost unfair that it won’t be a good fit for everyone who loves it.

This review was previously published in the Montreal Gazette.