Fiat (Fabbrica Italiana Automobil Torino, or Turin Car Factory), which for much of its history has been the biggest car manufacturer in Europe, had fairly small beginnings. Established in 1899 they open their first factory in 1900 and along with 35 staff they may just 24 cars that year. However sales increased sharply in 1903 when the 16 – 20HP, named after the 20 horsepower 4.2 litre straight four-cylinder engine that powered it, came out and about a hundred of these were built. In 1904 engine power was increased to 24 horsepower and the wheelbase was extended slightly. Around 130 of these were produced and it was a very profitable car indeed for Fiat.
The 1903 20HP still looked very much like a horse and cart with an engine added; the driver and a passenger sat side-by-side in separate seats completely open to the elements. The 1904 24 horsepower was a much more advanced design though. It actually looked more like a car, and featured a removable roof and seating for up to four people on bench seats. It also had a pumped water cooling system and a four speed manual gearbox; both innovative features at the time.
A total of 691 16-20 and 16-24HP cars were produced between 1903 and 1906, during which time the company created a total of 1149 cars. Fiat were well on the way to becoming not only the biggest manufacturer of cars in Italy, but in the whole of Europe too.
Many years later a gentleman called Jack Cohen who founded supermarket chain Tesco believe that to sell lots of product it was necessary to 'pile them high, sell them cheap'. Fiat proved the opposite of this theory.
16-24HPs were exported to the United States where they sold for a very high price indeed. The price in 1904 was around $4000; this was at a time when The price of a Cadillac Model A was just $750 and a Ford Model T was $825; a cost which actually fell to $525 by 1918. By contrast the price of a Fiat actually increased to $6,400 by that same year. Truly the company was been seen as a prestigious manufacturer whose cars were in demand in America even regardless of the eye watering prices being charged.