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The Government of the Republic of Serbia

In the service of citizens

Fiat Group to invest over €1bn

Belgrade, 29 September 2008

Serbian Prime Minister Mirko Cvetkovic commented the signing of the agreement between the government and Fiat and said that the investment in the next year will amount to around €800 million, while total investment will exceed €1 billion.

Mirko Cvetkovic

Following the signing of the agreement on strategic cooperation and joint investment between Serbia and Fiat, Cvetkovic stressed that together with several other agreements to be signed today, such as the Memorandum on Understanding with Iveco and Magneti Marelli, the total investment will exceed €1 billion.

He said that the impact of Fiat’s investment in Serbia will not only be indirect, but will also have a series of positive effects such as attracting other foreign investors, improving the trade balance and reducing the current account deficit.

Cvetkovic emphasised that vehicles manufactured in Kragujevac will draw in €1 billion a year and noted that the investment will affect the development of the city of Kragujevac and other regions in Serbia.

He said the government will continue working to improve the business climate in Serbia.

Serbian President Boris Tadic said that the agreement with Fiat is of particular political importance because Serbia’s close relation with Italy and Italy’s readiness to endorse Serbia’s EU integration process will now be firmly grounded in the economic sphere as well.

Tadic stressed that this is a great day for Serbia, for Fiat and the Italian industry.

We are making a fresh start after 50 years, which is why I share the pride of Serbian citizens for having one of the largest international and Italian companies in Serbia, stressed the President at the closing ceremony held following the signing.

According to him, apart from creating 5,000 new jobs, Serbia anticipates an increase in the employment rate in other economic branches, which will be a fresh start for Sumadija region and the entire Serbia.

He noted that the role of the government, the state and the President is to provide an opportunity to Serbian citizens to show what they are capable of, because thus they will have the chance to compete with others in the international automotive industry.

Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic said that the agreement with Italy’s Fiat, worth €950 million, is the largest investment in Serbia to date.

Dinkic specified that Serbia and Fiat will set up a joint company of which Serbia will own 33% of shares, whereas Fiat will have the stake of 67%, and added that it will employ 4,750 workers.

According to Dinkic, the agreement will enable Zastava to become a profitable company and the largest exporter in Serbia.

Dinkic announced that before the end of 2010, a completely new A-class model will be produced, and added that its design will be presented one month before production begins as it is still Fiat’s business secret.

He affirmed that the production of Zastava 10 will be continued and 10,000 vehicles a year are to be produced.

The Minister said that the factory will be located within the new customs zone in Kragujevac and added that a large number of vehicles will be exported, resulting in a €1 billion income.

Dinkic said that in cooperation with Kragujevac’s local authorities Serbia plans to invest more than €300 million in infrastructure and environmental protection in the next four years.

After signing the agreement with the Serbian government, Fiat Group President Sergio Marcionne said that vehicles will not be sold on the Serbian market only, but also in neighbouring and Western European countries.

Marcionne stressed that today is a very special day, because the signed agreement is a very important example of cooperation between a private company and state institutions.

He pointed out that this investment will on the one hand enable Fiat to obtain a factory in the strategic area and new clients, while on the other hand new investments will contribute to Serbia’s economic and technological development.

Fiat Group projects, produces and sells vehicles all around the world.

Since 1899, when Fiat was first set up in Turin as a pioneering company in the car industry, it has produced more than 97 million passenger and light goods vehicles and designed at least 470 models.