Fiat Automobiles Serbia Officially Founded

Serbia's Minister of Economy and Regional Development, Mladjan Dinkic, and the Vice President of Fiat Group, Alfredo Altavila, on Wednesday signed an annex to the contract on founding Fiat Automobiles Serbia.

The deal came after a meeting of Serbia’s President, Boris Tadic, and the President of Fiat Group, Sergio Marchionne, in Turin on Sunday, where they agreed that Fiat would pay the first 100 million euros in line with the contract on joint investment by the end of the year.

Speaking at a press conference in Belgrade after the meeting, Altavila said Tadic had played an important role in this business. “Tadic has given us great support and I am really grateful to him,” he said.
 
The Italian car giant signed a memorandum of understanding with Serbia on acquiring 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 stake of 67 per cent in the new company with Zastava holding the remaining 33 per cent. Fiat is expected to invest 800 million euros in the company while Serbia has pledged 300 million.
 
Dinkic said the transfer of the property of Zastava should be completed in six days, after Fiat pays the first installment. He added that the capacity of the newly founded firm would be about 200,000 cars a year, which he expects to generate about 2 billion euros in exports.
 
The agreement also envisions production of two brand-new car models intended for export to European and American markets.
 
Fiat hasn't yet announced which models will be manufactured in Kragujevac but Altavila said they would be based on small models.
 
The Italian company announced at the same time that it is to relocate production of its most popular model, Panda, from Poland to Italy.