"Serbia Autos Report Q1 2010" is now available at Fast Market Research

PR Log (Press Release) – Dec 08, 2009 – In Q408, the number of newly registered passenger cars fell by 4.1% as Serbian consumer spending began to be impacted by the economic crisis. The National Bank of Serbia (NBS) has stated that the overall economy shrank by 3% in the quarter.  BMI forecasts a 1.6% contraction in 2009, and we expect domestic sales to suffer. However, the market should still see growth, driven by the extra production provided by the new Zastava-Fiat factory. On January 30, the government signed a deal with Italian group  Fiat. 15,000 units of Fiat's Punto model will be produced in Serbia, beginning in March. This marks the first phase of the EUR700mn (US$900mn) agreement that was originally made between the parties in September last year. Under the agreement, Fiat will own a 70% stake in the Serbian state-owned carmaker,  Zastava Automobile, with the government retaining 30%. Deputy Prime Minister Mladjan Dinkic has said that that the cars will be made in Zastava's plant in Kragujevac, central Serbia, where the manufacturer currently produces its Zavasta 10, a brand nearly identical to the Fiat Punto. As such, production of the Zavasta model will be replaced by at least 15,000 units of the Fiat Puntos, which are to be sold in the 'Serbian market and in neighbouring countries', a spokesperson has said. Serbia's co-operation with Fiat is hailed as the largest foreign investment so far in the country and the partners are looking to reach an annual production target of 200,000 units by end-2010, and hope to add 100,000 units each year. The partnership, reached last year, gives Fiat a 70% stake in Zastava in return for its EUR700mn investment in Serbia. The government is expecting the Zastava-Fiat JV to lead to export-led growth in Serbia. Fiat's entry in the country will also help to attract around 100 Fiat contactors, which will be investing at least EUR200mn in the country. The Serbia Investment and Export Promotion Agency (Siepa) has estimated that increased export activity will lead to the creation of some 10,000 direct jobs in the industry. The partnership between Fiat and the Serbian government alone will create 2,400 direct jobs.

         

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