Fiat Serbia to Add Third Shift, Start Shipping to U.S. in May

VIENNA – Fiat Automobili Srbija, the joint venture owned 67% by Fiat and 33% by the Serbian state, will add a third shift at its plant in Kragujevac next month.

The facility presently operates two 10-hour shifts daily, four days a week. With the additional crew, it will run three 8-hour shifts a day, five days per week.

The plant employs 2,435 workers, with 600 new jobs to be added by the end of the year, CEO Antonio Cesare Ferrara tells the Serbian daily Politika.

Volume production of the Fiat 500L was launched in July.

“We have manufactured and exported 43,000 cars from the plant in Kragujevac since July,” Ferrara says. The vast majority of the cars are destined for export.

“Plan calls for the production of 110,000 to 150,000 cars this year, but the final result depends on the worldwide demand,” Ferrara says.

In July, Ferrara said the plant was targeting output of 120,000 to 180,000 cars for 2013.

“Currently, we are mainly focused on the export of cars to the U.K. as well as to the U.S. market,” he is quoted as saying. “The first shipment of about 3,000 vehicles will be sent to the U.S. by vessel in May.”

Vehicles destined for the U.S. already are being manufactured at the Kragujevac plant.

The auto maker also is gearing up for the production of the 7-seat Fiat 500XL with volume output scheduled for May.

Serbia is trying to support domestic sale of the Fiat 500L with subsidies.

Minister of Finance and EconomyMladjan Dinkic Ferrara last week signed an agreement at the Belgrade auto show calling for a special edition of the car, called the 500L Nacionale, that will be sold for €10,900 ($14,014), about €3,000 ($3,900) less than the 500L’s current base price.

Dinkic says 5,000 cars will be available for purchase under the subsidy this year and in 2014.

The Serbian car market is weak at the moment, and importers are protesting against the state support for the 500L. Only 21,901 new cars were sold in the country last year.

The Serbian government also is trying to negotiate a deal with the Russian government that would allow duty-free import of Serbian cars in order to improve the Fiat 500L’s export potential. Although Serbia has a free-trade agreement with Russia, it excludes cars.

Dinkic and Serbia Prime Minister Ivica Dacic will visit Moscow in early April to try to work out a deal, but observers believe the chances for success are low.