Fiat Automobiles Serbia

Reviving Automotive Industry

Mr. Vladimir Tomic

Head of FDI Department

Serbia Investment and Export Promotion Agency

Jun 2010

Presentation Outline

• The History of Zastava Automobili

• How to Privatize a Huge Company?

• Agreement with Fiat Group

• Effect of Global Economic Crises 2009

• The Revival on Plans in 2010

• Suppliers Opportunities

• Cooperation Fiat - SIEPA

The History of Zastava Automobili

• First production of trucks –

Kragujevac 1939

• Zastava starts assembling

Fiat cars – 1954

• Zastava releases first semi-

own design 1971

• Zastava production peaks

1989 – 250,000 cars

• Zastavas production

diminishes to 20,000 during

90es

• State invests some 10

million eur in modern

assembly line – 2005

1939

1954

1965

1971

1988

2005

How to Privatize a Huge Company?

The 14,000 employees producing 24,000 cars

• Zastava Automobili

• Zastava Kamioni

• Zastava Specijalni Automobili

• Zastava Elektro

• Zastava PES

• Zastava Livnica

• Zastava Kovacnica

• Zastava Tapacirnica

• Zastava Auto Delovi

• Zastava Masine….

Agreement With Fiat Group

• 28. September 2008.

• Fiat Group – Serbia 67% - 33% JV

• Fiat investment 700 mil EUR

• Government incentive 200 mil EUR (cash, credit, land, tax)

• 2,400 employees

• Planned production over 200,000 cars

Fiat’s Reasons

SKILLED WORKFORCE

GOVERNMENT SUPPORT

GREEN FIELD FOR SUPPLIERS’ PARK

LOCAL PRODUCTION

CLOSE TO “CORRIDOR X”

ASIDE EUROPEAN UNION PLANT LOCATION

LOCAL MARKET RECONFIRM LEADERSHIP

WITH NEW MODELS

EXPORT MARKETS SERBIA EXCHANGE AGREEMENTS

WITH CENTRAL AND EASTERN

EUROPEAN COUNTRIES

The Effect of Global Economic Crises in 2009

• Postponement of plans…

• Production equipment for other Zastava cars was removed

• Fiat concentrated on worker training – world class

manufacturing standards

• Production of 5,000 Punto Classic rose to 16,000 per year

• Finally, in December 2009 – first 100 million EUR!

The Revival of Plans in 2010

1,4 million m2 area

51 buildings

350,000 m2 covered surface

2010 2012

39% 28%

161% 108%

200

100

40

60

20

80

120

140

160

180

Supplier Opportunities

Dashboard

IP crossbeam

Door Panel

Seat Assembly

Tire Assembly

Front & Rear Painted Bumper

Exhaust assembly

Suspension

W iring Harness

Stamping and Welding

Supplier Park

Fiat – SIEPA Cooperation (Belgrade 25th May 2010)

Fiat – SIEPA Cooperation (Belgrade 25th May 2010)

Fiat – SIEPA Cooperation (Belgrade 25th May 2010)

Automotive Industry – State Strategy

Thank you for your attention

Mr. Vladimir Tomic

Head of FDI Department

Serbia Investment and Export Promotion Agency

vladimir.tomic@siepa.gov.rs

www.siepa.gov.rs