Italy's Fiat to invest EUR 888mn in Serbia in next two years.

By bne IntelliNews September 13, 2010
Italy's Fiat will invest EUR 888mn in its joint- venture with Serbia in the next two years, economy minister Mladjan Dinkic said in a statement with Vecernje novosti daily. So far, Fiat has invested EUR 100mn in Fiat Automobili Srbija, the joint venture between Italian car maker and Serbia, while in 2011 it will invest EUR 573mn and some EUR 200mn in 2012, Dinkic said. Thus, Fiat's total investment in Serbia will be higher by some EUR 100mn than initially planned, adding up to EUR 944mn. According to Dinkic, Fiat has adopted a business plan for its Serbian unit and decided to produce B class model there, mainly for export markets (EU and USA). Fiat will start test production of the new models in Serbia in 2011, while mass production will start in 2012. The Serbian plant is planned to produce 200,000 cars a year. The output capacity could be boosted to 300,000 cars later on. The joint venture deal between the Italian car maker and the Serbian government was inked in 2008. The initial investment has been delayed due to global economic downturn. Fiat acquired Serbian car maker Zastava at the end of 2009 after paying EUR 100mn in initial capital for the JV. Over the past two years, Fiat has been making the Punto Classic model in Serbia. Punto car production will be phased out by 2012.

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