Serbia Signs Deal to Build First 15,000 Fiat Puntos

Belgrade and Fiat agreed to create a joint company owned 67% by Fiat and 33% by the Serbian government.

Fiat on Jan. 30 signed a deal with the Serbian government to produce 15,000 units of the Fiat Punto in Serbia beginning in March, a Fiat spokesman said. The deal signed in northern Turin is the first phase of a 700-million-euro (US$900 million) accord reached last September, the spokesman said.

Serbian Deputy Prime Minister Mladjan Dinkic signed the accord to produce the cars at the Zastava plant in Kragujevac, central Serbia, the spokesman said, adding that production would begin in late March with an output goal of 15,000 units by the end of the year. The cars would be sold in the "Serbian market and in neighboring countries," he said.

The Zastava plant already produces cars nearly identical to the Fiat Punto but with its own brand name, the Zastava 10. These are to be replaced by the Puntos.

Under the accord signed in September 2008, Belgrade and Fiat agreed to create a joint company owned 67% by Fiat and 33% by the Serbian government with an investment of 700 million euros in the Kragujevac plant.

Dinkic said at the time that it was the largest foreign investment "so far" in the former Yugoslav republic.

The new company has an eventual annual production target of 200,000 units by the end of 2010, increasing by another 100,000 each subsequent year. It expects to create some 2,400 jobs.

The Zastava plant, the only one in Serbia that produces cars for individuals, had its heyday before the Yugoslav wars in the 1990s.

Copyright Agence France-Presse, 2009

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