serbia

Fiat may start full production of its new model in Serbia next year

Fiat may begin full production of a new model, codenamed "L-zero," in Serbia in May or June 2012 after technical tests are done. This vehicle is perceived to be a potential successor to the Lancia Musa and Idea models.

The new model is mainly developed for the European markets such as Russia, according to Antonio Cesare Ferrara, who heads Fiat Automobili Srbija -- the joint venture of Fiat and the Serbian government.

Ferrara further stated that the new model may also be introduced in the United States in a later stage, according to Autonews. The factory where the new model will be built is located around 110 km or 68 miles from the capital Belgrade, and is projected to have a production capacity of up to 250,000 units annually.

Fiat receives 500 million euro bank loan for Serbian production

The European Investment Bank (EIB) said that, in 2011, it will lend EUR500 million ($684 million) to a joint venture with Fiat S.p.A. in the central town of Kragujevac, Serbia.

The EIB said the loan will help modernize and expand production capacity of the Fiat Automobili Srbija (FAS) facility, which currently makes the Fiat Punto Classic model, and aid investment in civil works, equipment and machinery and infrastructure.

EIB spokesman Marko Santarelli told Reuters that the timing of the signature will depend on the Fiat Group’s investment needs.

Fiat to shift production to the US, Poland and Serbia, if Italy plans fail

The countries that would benefit if the uncooperative unions in Italy ruin Fiat S.p.A.’s plans to expand production volumes are the US, Poland and Serbia. Fiat CEO Sergio Marchionne said that he will consider other production locations if he fails to negotiate work rules that are more efficient for Fiat’s Italian assembly plants.

Marchionne told analysts on October 21 that its vehicles that are intended for western Europe need a production facility and that it has other plants that could replace it. Last April, Fiat revealed a new plan to expand car production in Italy from 650,000 units in 2009 to 1.4 million units in 2014.

However, Marchionne seeks support from the union to increase the efficiency of its production. This entails an 18-shift workweek instead of the 10-shift week that it currently has.

Fiat shows two new models to Serbian government officials

The Economy Ministry said that Serbian government officials were shown two models by Fiat S.p.A. These are the two vehicles that will be produced at its plant in the Balkan country and exported to the European Union and the US.

In the second quarter of 2012, Fiat’s factory in Kragujevac will be producing a five-seat model designed for the EU and a seven-seat vehicle to be sold there and in the US.

After the officials’ visit to Fiat headquarters in Turin, Mladjan Dinkic, Serbia’s deputy prime minister in charge of economy, sent an email about these plans.

Instead of Italy, Fiat S.p.A. will be producing its two new minivans in Serbia, according to CEO Sergio Marchionne. There are also plans for Fiat to build four other models (including Alfa Romeo and Chrysler group cars) in other countries instead of Italy. It was announced last December that the replacements for the Idea and Multipla minivans will be built in Fiat's Mirafiori plant in Turin, Italy.

However, Marchionne said last Wednesday that this plan was reversed after Fiat failed to receive enough workers' concessions to assure the "governability" of its Pomigliano d'Arco plant, near Naples.

In a conference call, Marchionne told analysts that it would be risky to confirm new investment in Italy due to the "uncertainty" of a labor agreement to increase productivity at Pomigliano.

Test production of Fiat S.p.A.'s new models will begin in Serbia in the second half of 2011, according to a Serbian Economy Ministry official. This phase out the Punto, which is available in Serbia as well as neighboring markets. Fiat workers were so enraged with Fiat's plans to start production of two new car models at its unit.

Prime Minister Silvio Berlusconi would only say that he is hopeful that the decision will not have an impact on domestic manufacturing.

Nebojsa Ciric, Serbia's deputy minister in charge of economy and state asset sales, said that Serbia wouldn't interfere in any argument Fiat had in its home market. He said that the key was Fiat's intention to improve its initial investment in Serbia by 100 million euros ($130 million) to 800 million euros. He also said that the test series will start next year, most likely in the third quarter but no later than the fourth quarter.