After successfully luring Italy’s Fiat, Serbia hopes to attract another car maker to invest on its soil in the next two years, hoping that its European Union membership prospects and a joint venture with the Italian car maker to build a new family car will help boost foreign investments, Serbia’s President Boris Tadic said this week.
“I hope to announce something by 2014,” he told The Wall Street Journal after celebrating the unveiling of the new model, the 500L.
Serbia is promoting itself as a regional industrial hub in the Balkans. Based in the town of Kragujevac, the EUR1 billion plant will make the 500L model. It will start production in May to have the 500L in showrooms across Europe by the fourth quarter. By 2013, it will be shipping it to the U.S.
With a work force of 2,500, the plant has a production capacity of 200,000 units per year, which can later be increased to 300,000.
The plant reflects a trend among car makers looking to reduce production costs while staying close to the crucial western European market. By opening plants in other parts of Europe, they get access to a cheaper work force and tax breaks and subsidies from countries eager to attract investment. In Serbia, the average wage is about a quarter of that in Italy.
It will take many years for Serbia to join the EU. Mr. Tadic said he expected his country to start accession talks by the end of the year after winning official candidate status for membership earlier this month.
“But you never know,” he added. “It’s up to the EU.”
EU leaders voted earlier to move forward with Serbia’s request to join the bloc, in part because of the country’s progress in capturing accused war criminals and mending ties with Kosovo, a breakaway province that declared independence in 2008.
With its candidate status, Serbia can begin accession talks with the EU.
