Fiat plans to intensify production at the former Zastava Automobili factory in Serbia

Article by Christian Andrei, on April 14, 2012

Fiat plans to intensify production at the former Zastava Automobili factory in Kragujevac, central Serbia, as one of its suppliers has been granted a 20 million euros ($26 million) loan from the World Bank. A key Fiat supplier in Serbia is getting the loan in order to help revitalize the automotive industry in the country.

This plant had been where the Yugo small car was produced when the country was under Communist rule. Fiat presently produces the Punto subcompact at the plant and this is also where production of the 500L will begin this month. The loan was approved by the World Bank's private lending arm, the International Finance Corp.

The recipient of the loan is PMC Automotive, a joint venture between Italian automotive supplier CLN Group and PROMA Group. The lender said that this loan is a move by the IFC to support Serbia’s goal to revive its car industry and to create new skilled jobs. The metal-stamping factory of PMC Automotive has about 370 employees.

It is the supplier of parts for the Kragujevac plant as Fiat prepares to increase the current 20,000-car capacity of this facility to 140,000 in 2013. In the fourth quarter in Europe is when Fiat starts selling the 500L, a longer version of Fiat's retro-styled 500 minicar.

It is the replacement for the existing Idea and Multipla models found in Fiat's lineup. Starting in early 2013, the 500L will be exported to the U.S. The Kragujevac factory is a joint venture with the Serbian government, formed when Fiat took control of the defunct Zastava Automobili to become a 67% owner of Fiat Automobili Srbija.

Topics: fiat, production

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