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Fiat, Kragujevac to sign memorandum of cooperation tomorrow
Kragujevac,
5 May 2008
Serbian Minister of Economy and Regional Development Mladjan Dinkic announced that Fiat Vice President Alfredo Altavilla and Kragujevac Mayor Veroljub Stevanovic will sign a memorandum of strategic cooperation on May 6.
Following a meeting yesterday with Zastava union leaders, Djelic stressed that thanks to the memorandum, the city authorities will be able to free Fiat from paying all local taxes in the next ten years and provide it with construction land free-of-charge in case the company decides to expand.
He explained that the memorandum will be part of the already signed memorandum of understanding and joint investment between Serbia and Fiat, through which this company with planned investments worth €700 million became the majority owner of Zastava (70%), with the remaining 30% still owned by the state.
According to him, Kragujevac will be granted status as a customs free zone, which will be beneficial not only for Zastava, but also for other small and medium sized enterprises, as they will be able to import materials, produce goods and export them without customs fees and VAT.
The Minister said that by end-2009, Fiat will boost production to 200,000 vehicles and by end-2010 to 300,000. He added that the Torino factory will produce two completely new models – automobiles of class A and B – that have not been unveiled internationally yet, and that from January 1, 2009 customs fees on the import of vehicles will be halved.
The signed Stabilisation and Association Agreement guarantees customs-free import of vehicles, which is of huge importance for Fiat, stressed Dinkic and added that the Italian company has estimated that it will make new models in Kragujevac rather than build a new plant.
He said that apart from Volkswagen, another German company had shown interest in Zastava Automobili and that the arrival of international car makers to Kragujevac is a great chance for the technical school in the town and for students who are to graduate from the Faculty of Mechanical Engineering.
Volkswagen is interested in greenfield investment because its experts estimated that it will be more profitable to construct a new plant in Serbia, noted Dinkic and said that what is important to Volkswagen is customs-free export of vehicles to Russia, which is why it will discuss it with Russia immediately after the elections.
He explained that the memorandum will be part of the already signed memorandum of understanding and joint investment between Serbia and Fiat, through which this company with planned investments worth €700 million became the majority owner of Zastava (70%), with the remaining 30% still owned by the state.
According to him, Kragujevac will be granted status as a customs free zone, which will be beneficial not only for Zastava, but also for other small and medium sized enterprises, as they will be able to import materials, produce goods and export them without customs fees and VAT.
The Minister said that by end-2009, Fiat will boost production to 200,000 vehicles and by end-2010 to 300,000. He added that the Torino factory will produce two completely new models – automobiles of class A and B – that have not been unveiled internationally yet, and that from January 1, 2009 customs fees on the import of vehicles will be halved.
The signed Stabilisation and Association Agreement guarantees customs-free import of vehicles, which is of huge importance for Fiat, stressed Dinkic and added that the Italian company has estimated that it will make new models in Kragujevac rather than build a new plant.
He said that apart from Volkswagen, another German company had shown interest in Zastava Automobili and that the arrival of international car makers to Kragujevac is a great chance for the technical school in the town and for students who are to graduate from the Faculty of Mechanical Engineering.
Volkswagen is interested in greenfield investment because its experts estimated that it will be more profitable to construct a new plant in Serbia, noted Dinkic and said that what is important to Volkswagen is customs-free export of vehicles to Russia, which is why it will discuss it with Russia immediately after the elections.
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