Fiat to build new low-cost cars in Serbia
Fiat Group Automobiles and the Serbian Ministry of Economy and Regional Development signed a memorandum of understanding today to create a new company that will take over Zavodi Crvena Zastava, 140km south-east of Belgrade. Fiat will hold a majority stake in that company.
The plant will also become the manufacturing center for central and eastern Europe of a new family of low-cost models, the B-compact program. These models will debut in 2010.
Zastava already has a deal with Fiat for assembling old Punto cars and selling them as the Zastava 10 in Serbia and neighboring Balkan countries. The model is also exported to Russia.
In a joint press conference today in Belgrade, Fiat said the new company will invest 700 million euros to modernize the Kragujevac plant. The Serbian government will contribute 200 million euros through tax breaks and incentives.
Fiat Group CEO Sergio Marchionne said, in a statement, that the Serbian plant will help support Fiatís ďgrowth and volume aspirations.Ē He cited historical ties between Fiat and Kragujevac and said the company considers Serbia ďan integral extension of our domestic market.Ē
By the end of next year, Fiat plans to build 200,000 units a year in Kragujevac. Capacity will grow to 300,000 units from 2010 with the addition of the B-compact models.
The first new model to be built in Serbia is dubbed the Topolino, similar to the iconic two-seat minicar Fiat introduced in 1936.
Based on the A-platform used by the 500 and Panda minicars but shortened to 3150mm in length, the new Topolino will seat four people and debut late next year.
In 2010, Fiat is planning an upscale variant of the Topolino for the Lancia brand. This version will be built in Serbia too.
From 2010, Kragujevac will also build the B-compact family of low cost models for central and eastern Europe.
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