When the Fabricca Italiana Automobili Torino (F.I.A.T.) was first set up in 1899 It was, for once, a well-financed business with industrialist and major shareholder Giovanni Agnelli as the the board's secretary. They were not there to play games; with aristocrats such as Count Emanuele Cacherano di Brischerasio, Count Roberto Biscaretti di Ruffia, Marquis Alfonso Ferrero di Ventimiglia and an assortment of wealthy industrialists amongst the founders they were serious about dominating car manufacture not only in Italy but the world as well. They haven't done too badly since.
The first cars they produced had small engines and they only sold in single figures but by 1903 a much more powerful car, with a 4179 cc stright four cylinder engine producing 20 horsepower – called, surprise surprise, the 16-20HP was launched and this was the first car Fiat ever built that sold more than a hundred copies.
These were the very early days of motoring however and bodywork design had not fully evolved from the horse and carriage days. the 16-20HP was a continuation of these early days and it very much resembled a horse-drawn carriage with the horse replaced by an engine. The driver and sigle passenger were exposed to whatever the weather could throw at them. The next incarnation the 16 – 24HP with a longer wheelbase, which was introduced in 1904, was a major step forward.
This not only had a more powerful engine producing 24 horsepower but it actually looked more like what we imagine a car to be. This time there was a removable hood to protect the occupants from the elements, and there were two bench seats so it could carry a maximum of four people. With a maximum speed of over 40 mph it was at least faster than horses!
It was also quite innovative for the day. A pumped water cooling system for the engine was introduced, and it actually had four gears. It was a great hit in the United States of America, where you could buy one for US$6700 (UK equivalent £4300) at a time when America's own Cadillac model A could be bought for just US$750, or £485. Continental cars were beginning a period when they would be considered to be vastly more prestigious than home-made ones in the USA.
About 130 16-24HPs were built before the company reverted to building a modified 16-20HP in 1905, selling 171 copies, and then by 1906 a larger 4.5 litre engine was introduced and 290 of these were sold. Fiat was well on the way to becoming a mass producer of motorcars.