Assuming you haven't been marooned on a desert island for the past 12-months, you may have noticed that Fiat has a little car called the 500 on its books. This ultra-chic newcomer has set tongues wagging throughout the industry and already has more awards to its name that you could cram into its amply proportioned boot. Yes, the furore surrounding the 500 has been quite something but Fiat is keen that we don't forget about the other small cars in its range. To help jog the public's memory so far as the Panda city car is concerned, Fiat has launched this Panda Special Series 360 model.

How the Panda gets along in the presence of the 500 will be interesting to see. Will it settle into its own comfy niche or become engulfed by the PR storm that surrounds the Cinquecento? Only time will tell. What we know is that Fiat isn't going to let its charge be usurped by the outrageously cute newcomer without a fight.

The Panda was the car that first signalled the rejuvenation of Fiat for many people. Making great strides in terms of build quality and practicality, it was the first Fiat for a long time that could realistically be described as a class leader. It paved the way for the Grande Punto, the Bravo and the 500, the cars that have put Fiat firmly back at the European small car market's top table. The Panda also supplies the platform for the 500 so even before we got our first look at that car's beguiling retro styling, we knew it was going to be built on solid foundations. The Panda's continued success may well hinge on how highly buyers value its extra practicality and how effectively Fiat can massage its value proposition with models like the Special Series 360.

".the Panda manages to cram high levels of practicality and desirability into its compact dimensions"

So what's the story with this special edition Panda? The car is based on the 1.2-litre Panda Dynamic from the standard range so it features everything that model does but with a little bit extra. All Special Series 360 Pandas get 14" alloy wheels, metallic paint and a Special Series 360 sticker on the B-pillar to remind you of your Panda's special status. The interior benefits from the Fiat logo embossed on the front seats while the equipment quota is also ratcheted up a few notches. Air conditioning, split folding rear seats and a Bluetooth phone system are fitted as standard.

Tally up the extra features on the Panda Special Series 360 and you'll end up with a £1,600 bill but that isn't reflected in the model's price. £7,195 is the value Fiat has placed on the car and that's actually £400 less than the standard Panda Dynamic 1.2 would cost you. It's reasonable to assume that these Special Series 360 Pandas won't be hanging around for long.

The 1.2-litre engine is one of the Panda's greatest assets. True, 60bhp may not sound a whole hill of beans, but when fitted to the Panda it gives it enough go to make it a good deal more versatile than many citycar rivals. It's almost as if the citycar sector can be subdivided into those models which you'd never contemplate taking a longer journey in and cars like the Panda that are well up to motorway cruising. Part of the reason for this is that the Panda 1.2 features a four-cylinder engine, whereas many of its rivals have to work a three-cylinder unit that much harder to keep pace. At typical motorway speeds, the engine is a little vocal but not too intrusive and wind and road noise are well suppressed.

Fiat has gone to great lengths to instil a big car feel in the Panda and the amount of soundproofing pays dividends. Fiat claim the Panda is the only car in its class to have 99 per cent of its interior surface lined, and this certainly helps both the perception of quality and noise suppression. The Panda will pull from low speeds cleanly and the gearshift is probably the best in the citycar class. The clutch feels like a well engineered item as well, being progressive in its action, making stop/go progress easy to manage. The 'City' button takes all the weight out of the steering system and makes three point turns an exercise in effortless wheel twirling.

The cabin is very well finished with a good deal of space. Room in the back of the Panda is a mixed bag, the car being wider and taller than many rivals but without a great deal of legroom. Still, Fiat can only do so much with a car that measures just 3.54m from nose to tail. Luggage space is surprisingly good, especially if you factor in the added practicality of the Special Series 360's split/fold rear seat. The hatchback is both wide and tall and there's no intrusion from the rear light clusters although the rear wheel arches limit ultimate carrying capacity somewhat.

Structural solidity is the first factor in the safety equation and the Panda features body structures that at first cushion impact and then direct energy away from the rigid passenger compartment. You can also choose no fewer than six airbags if you wish, although driver and passenger airbags are standard on all models. The Special Series 360 is fitted with anti lock brakes, and brake assist at no extra cost.

The Panda has flourished up until this point and rightly so. As an inexpensive utility vehicle with a sprinkling of style it's tough to beat. The arrival of the 500 will affect Panda sales but Fiat knows its stuff and the two are very different kinds of vehicles. Where the 500 is more of a fashion statement, the Panda manages to cram high levels of practicality and desirability into its compact dimensions. With the Special Series 360 models upping the value anti still further, the Panda should get along just fine with its new sibling.