As the first time Fiat had entrusted the development of a high-volume model to an outside company,[11] Giugiaro and Mantovani spent 15 days in the summer of 1976 in Porto Cervo, Sardinia designing the Panda — using the working name Zero.[12] Giugiaro developed the packaging and styling; Mantovani conceived the car's technical approach.

Fiat CEO Carlo De Benedetti's design brief specified a straightforward 'container' with a spacious and spartan interior, weighing and costing no more than the Fiat 126 it was replacing — and having a similar design approach as the Citroën 2CV or Renault 4. Notably, in the late 1950s, the head of Renault, Pierre Dreyfus, had called for the Renault R4 to have an egalitarian approach, like blue jeans, "which people can wear in any situation if you do away with the pretension of snobbism and social conformity.