In 1989, Rick Moranis played a nerdy dad who accidentally downsized his children to an insect scale in Honey, I Shrunk The Kids. He probably wouldn’t have believed it if someone told him that 23 years later automakers would be doing the same thing to their cars.

For those of us living in the North American 2012, there are increasingly large swarms of little cars buzzing around the streets. The din their tiny engines makes isn’t overwhelming yet, but just wait.

General Motors’ German subsidiary, Opel, is planning to release a micro car they’re calling the Allegra (or, tentatively, Junior). No, not the allergy medication, though the thing is small enough to be mistaken for a bee in ragweed season, at least compared to the standard American palate. When the Allegra hits Europe in 2013 it will probably stand to compete against cars like the Volkswagen Up, MINI Cooper and Fiat 500.

In fact, it’s a solid 3.3 feet longer than the Mercedes-Benz spawned Smart ForTwo, which looks like a cross between a golf cart and an alien space pod. Our spies caught the Opel Allegra on camera during winter testing, but what’s the big deal? Opel cars aren’t sold in North America, right?

Well, not necessarily. Rumors are floating around that the not-so-smallish micro car might make it overseas rebadged as a Buick. (Why not? It’s not the first Buick to come from Opel). And with the recent launch of the Fiat 500 and the Scion iQ on our shores, the market for mini-cars is growing.

Of course, the name will likely change to keep big pharma happy.

GALLERY: Opel Allegra/Junion Spy Photos

While past reports have suggested that the Dodge Avenger is dead, speculation has apparently been a bit premature. Chrysler/Fiat have plans for a number of new cars in the future including the introduction of new midsize sedans which will update the Chrysler 200 and Dodge Avenger for 2013. The new Avenger and 200 will be based on the Dodge Dart platform. Chrysler/Fiat CEO Sergio Marchionne also intends to have a Chrysler premium compact hatchback in the mix, known for now as the “Chrysler 100.” If given the ‘okay’ for production, then the Chrysler hatch will be exported as Fiat European luxury brand Lancia as well.

Also, next generation crossovers 2013 Jeep Compass and Jeep Liberty will receive the Dart platform too. Despite the small-car platform, Marchionne insists, ”It’s going to be a trail-rated, full-blooded Jeep that has its origins in the architecture of a sports car.”

But more importantly, Italian sports car enthusiasts of the western hemisphere have long awaited the return of Alfa Romeo ever since the merger of Chrysler and Fiat was first announced. While Alfa Romeo’s return to the United States has been delayed until 2013, Marchionne insists the legendary Italian marque will return. “There will be plants making Alfas in the United States and Europe,” says Marchionne. “I need to export to Europe from the U.S. The volumes I get here are how I reintroduce Alfa to Europe.”

Expectations are high for the Alfa vehicles as an upcoming 1.8-liter engine producing a staggering 300-hp is currently in the works. In regards to Alfa Romeo vehicles for the United States, Marchionne said, ”We had to make sure they were lightweight, fast cars with Alfa powertrains.

[Source: USA Today]

Look, we get it. Everyone wants to be a little optimistic when a new model hits the streets, especially when it’s one of Italy’s most iconic compact cars.

When Chrysler first introduced the Fiat 500 (read out review here) to the American market, they might have been a little too optimistic by estimating that they’d sell 50,000 of them in 2011. Turns out, even CEO Sergio Marchionne has no problems admitting that their initial sales target was “incredibly naive.”

Fiat’s original goal was to best the MINI Cooper 2010 sales figure of 45,644 but the 500 fell way short with just 19,769 being sold in 2011. Despite not even coming close to their original sales goal, Marchionne is adamant that Fiat will still do well in the US and admits that “we set ourselves up for a fall.”

A more realistic sales figure of 25,000 – 30,000 is anticipated for 2012 and that number could be aided by the introduction of the Fiat 500 Abarth.

[Source: CNN]

Fiat has finally announced the pricing on their 500 Abarth model for the American market, starting at $22,000 and will include a segment-exclusive, full-day Abarth driving experience.

The 500 model that’s been “designed for track-day enthusiasts and driving purists who want the ultimate high-performance small car at an attainable price,” the 500 Abarth is powered by a 1.4L MultiAir Turbo engine with 160-hp and 170 lb-ft of torque. The rest of the vehicle has also been tweaked for a truly sporty driving experience, including Abarth-tuned suspension, brake systems, dual exhaust, turbo-boost gauge with integrated LED shift light and 16-inch wheels.

Fiat will throw in an Abarth Driving Experience for new owners, offering them the opportunity to attend a segment-exclusive driving experience at no additional charge. The Abarth Driving Experience features a full day of driving training with instructors from the Richard Petty Driving Experience in a safe and structured setting.

GALLERY: Fiat 500 Abarth

Italian coachbuilder Castagna Milano has their eyes set on the American market, and to lead their entrance is a stretched Fiat 500 limo in three different variants: LimoSun, LimoCity and LimoCity Presidential.

To be frank, we’re a little skeptical that the American market would even have a demand for a Fiat 500 limousine, considering that Fiat 500 sales as a whole are lacking, but hey, at least the option is there. In the conversion, the length of the vehicle goes from 11.5-feet to 17.45-feet while the wheelbase jumps from 7.55-feet to 13.45-feet. Height also goes from 4.89-feet to 5.18-feet in the CityLimo.

The LimoSun is based on the Fiat 500 convertible  and features four seats facing one another in the passenger area. The large openings on the side and the roof can be closed with transparent panels.

The LimoCity on the other hand is a closed version packed with a circular sofa couch, mini-bar and electric sliding doors. Lastly, the LimoCity Presidential begins with a US-spec Fiat 500 and features a pair of electric motors that are capable of reaching 100-mph and a range of 155-miles.

GALLERY: Castagna Milano Stretched Fiat 500 Limo

[Source: WorldCarFans]

It’s no surprise that the 500′s return to North America did not make the splash that Fiat expected. Having sold less than 20,000 vehicles in its first model year in the United States, the 500 only did half as well as the company initially forecasted.

The success of the 500 is essential to the Italian automaker’s re-entry into the North American market. In Europe, Fiat sold more than 770,000 units since the 500′s introduction in 2007. Fiat/Chrysler CEO Sergio Marchionne admitted that the 500′s weak performance was in part due to overly-optimistic forecasting. “We thought we were going to show up and just because of the fact people like gelato and pasta, people will buy it.”

However, Fiat believes that creating variants for the 500 could help boost its popularity.

Set for unveiling at the 2012 Geneva Auto Show, Fiat hopes that a 5-door Fiat 500 wagon will find better success in the North American market. The official release date of the Fiat 500 wagon is slated for 2013, while a sportier Fiat Abarth hot hatch will be available for sale later this year.

Whether the 500 wagon will boost Fiat sales remains to be seen. While the wagon’s dimensions will be slightly larger and more suitable for American consumers, station wagons are historically unpopular in North America.

[Source: Car Connection]

It appears that the Japanese have also embraced Italy’s compact Fiat 500, but this was hardly what we expected from a Japanese tuner. Office-K out in Japan got their hands on a limited edition Fiat Abarth 695 Tributo Ferrari and figured it’d look a whole lot better in chrome.

The Abarth 695 Tributo Ferrari comes in its own Scuderia Red finish, but Office-K didn’t really care for that shade. They wrapped the entire compact in chrome vinyl while applying racing stripes in Italy’s infamous colors. Surprisingly nothing else was done to the vehicle, leaving the upgraded 1.4L turbocharged four-cylinder with 180-hp.

Abarth’s 695 Tributo Ferrari features its own aero package, 17-inch wheels, Brembo brakes, carbon mirrors, “Record Monza” dual exhaust and suspension upgrades as well. On the inside, Abarth outfits the Tributo Ferrari with a pair of carbon fiber bucket seats, flat-bottomed leather steering wheel with red inserts, and carbon fiber trim.

Check out a video showing off the shiny, chrome Abarth 695 Tributo Ferrari after the break.

[Source: Carscoop]

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The fuel wars are heating up as automakers search for new ways to squeeze more mileage out of their cars. While some might take this chance to preach doom and gloom for future cars, Chrysler-Fiat CEO Sergio Marchionne isn’t ready to call the Road Warrior just yet.

Some companies are turning to electric vehicles, others to extended-range hybrids. Yet another school of thought is turning to diesel engines to meet mounting expectations for fuel consumption. In the face of what seems like a trembling industry, unsure of what the next revolution will be, Marchionne stands strong.

“I believe in our industry’s ability to find solutions. Even with traditional combustion engines, we have only skimmed the surface of the ability to squeeze out higher fuel efficiency levels, allowing us to extract much more power out of smaller displacements,” Marchionne said during an appearance at the Automotive News World Congress.

For the time being, he is determined that diesel engines will remain reserved for larger cars, like the Jeep Grand Cherokee (pictured above), which Chrysler will begin assembling in Detroit early next year. Diesel engines, despite their shrinking stigma, are still a minority consideration in the overall U.S. market. We really like some of the small car diesel variants to pop up recently. For example, Mazda will offer a diesel version of their Mazda6 sedan in 2013, as will Chevrolet with the Cruze.

Despite that, Marchionne is hanging onto the gasoline engine and hoping cars like their recently unveiled Dodge Dart will tackle the small car market and capture young consumer imaginations. Critics of his stubborn resolve might want to hold their opinions for now, considering the about face Marchionne championed since 2009, taking Chrysler from near-ruin to respectable territory.

“Fiat and Chrysler come from two different pasts, but they have something very strong in common,” said Marchionne. “Both have been to hell and back.”

GALLERY: 2013 Jeep Grand Cherokee Diesel

[Source: The Detroit Bureau]

When there’s blood in the water, sharks start to bite. If the automotive industry does nothing else, it fosters ruthless competition and a winner-takes-all mentality akin to professional sports.

That’s exactly why reporters were peppering Chrysler-Fiat CEO Sergio Marchionne with questions about his company wanting to buy GM’s struggling German subsidiary, Opel.

Outside scheduled announcements, Marchionne told the Detroit News that ”there’s a willingness on the part of Fiat-Chrysler to listen,” going on to say that ”this is an industry that is in evolution.”

Despite his affirmation that Fiat would be willing to consider the idea, there doesn’t seem to be any plan being cooked up. GM vice chairman Steve Girsky said he and Marchionne had dinner last Sunday and that Marchionne wasn’t interested in Opel.

“Opel is not for sale,” Girsky said. “We’re going to make Opel work.” GM is “committed to returning our European business to sustained profitability. There’s a lot of work to do.”

For better or worse, the business world is sensitive to such discussions. The notion that something like that might happen drove speculation that Fiat might also be eyeing Peugeot. Once again, it seems the rumor mill is churning out little more than hot air, though Marchionne maintains that he is open to opportunities.

For now it seems the dinner discussions that spurred these questions were little more than meals, though we’ll stick to Marchionne’s philosophy and refuse to rule anything out, especially considering his original plan after buying Chrysler was, in fact, to take Opel as well.

[Source: Detroit News]

Pricing for the Fiat 500 Abarth model has finally been announced, starting at $22,000 making it cheaper than the Volkswagen GTI, MINI Cooper S and (presumably) the Hyundai Veloster Turbo.

Though the comparisons with the other models aren’t exactly apples to apples on paper, Fiat’s 500 Abarth has the most impressive power-to-weight ratio compared. With 160-hp and 170 lb-ft of torque in a 2,533-lb body, the Abarth, in a way, provides the best bang for the buck.

It’s powered by a race-inspired 1.4L MultiAir Turbocharged engine and also features Abarth-tuned suspension, brake systems, dual exhaust, turbo-boost gauge with integrated LED shift light and 16-inch wheels. The interior also gets some race-inspired amenities with performance seats featuring a one-piece design with large side bolsters and racing-harness pass through with accent stitching. It’ll come standard with BLUE&ME Handsfree Communication, Bose premium audio and steering-wheel mounted audio controls.

GALLERY: Fiat 500 Abarth