Serbia and Fiat to Sign Deal by Year's End

Serbia’s President, Boris Tadic, and the president of Fiat Group, Sergio Marchionne, agreed on Sunday that an annex to the contract between Serbia and the Italian car giant on founding Fiat Automobiles Serbia will be signed this year.

Speaking at a meeting with Marchionne, Tadic said by the end of the year Fiat would pay the first 100 million euros in line with the contract on joint investment agreed between the company and Serbia.
 
Fiat signed a memorandum of understanding with Belgrade on the acquisition of the Serbian state-run car firm Zastava in April 2008, presaging the establishment of the new company.
 
Under the deal, Fiat will have a majority 67 per cent stake in the company with Zastava holding 33 per cent. Fiat is expected to invest 800 million euros in the company while Serbia has pledged 300 million, the Belgrade daily Danas reported.
 
Tadic visited the Fiat factory on Sunday where he met Marchionne and Fiat’s executive director, Alfredo Altavilla. He expressed satisfaction, noting that Fiat would produce two models in Zastava while “initial production will be around 200,000 cars a year.
 
"I am very satisfied that by the end of this year we have another very significant success, and that is the signing, finally, of the annex to the contract between Fiat and Zastava,” the Serbian President said.
 
The production process is scheduled to start in early 2010, Marchionne announced at the meeting. “This is a significant step forward. Finally we're in a position, before the end of 2009, to invest money and start working in Kragujevac.

“The reason why this process was postponed for more than we expected is the economic crisis," Marchionne added.
 
Zastava has a long history of cooperation with Fiat. In the 1950s, Zastava started production on the local version of the Fiat Topolino subcompact, Fiat 1300 and Fiat 128 sedans. In the 1980s, Zastava launched production of the Yugo and Zastava 101 subcompacts and licensed Fiat Iveco trucks and utility vehicles.