The compact city car, which boasts a box-like rear end, roof bars and seating for five, will be completely revamped for the first time since 2003 in 2012.
At the new model’s launch in Italy, Fiat revealed it was aiming for a sub-10,000 Euro price tag which would mean a price under £9,000 in the UK.
The price will apply to entry-level models of the new city car and it will make it extremely competitive in the small car market in the UK where many of its key rivals such as the Ford Ka start from upwards of £9,000.
The Fiat Panda will also benefit from one of the most efficient petrol engines on sale today – the Fiat TwinAir engine.
The two-cylinder engine was first used on the Fiat 500 and because of its small size and efficient use of fuel, the engine is eligible for free road tax in the UK and is one of the first petrol engines to be exempt from the London congestion charge.
At the other end of the range, the new 2012 Fiat Panda will also come with a 4×4 option some time after launch.
Alongside the engine upgrades and low price, Fiat has also updated the interior with some better plastics and more equipment, while the exterior retains the classic Panda shape but with a revised front end, softer lines and a more rounded, modern design.
Fiat is planning to offer the new Panda as a test car for customers who are having their current Fiat Panda checked in dealerships but this has not been confirmed for UK Fiat dealerships.