The story
From 1955 to 2008, the Kragujevac plant manufactured Zastava Automobiles under the Zastava, Yugo, and Fiat brands. Serbia's central Šumadija region was severely impacted in the 1990s by the collapse of Yugoslavia, as well as the subsequent war and its sanctions. The factory buildings were severely damaged in 1999 during the Kosovar War by NATO bombings.
By the early 2000s, automotive companies began opening new manufacturing plants in nearby Hungary, Romania, Slovakia, and Slovenia — representing brands including Audi, Mercedes-Benz, Renault, and Suzuki. Manufacturing costs in Serbia were projected at one fifth those of Italy and half of those in Poland.
In April 2008, Fiat reached an agreement to purchase the Kragujevac plant, completing a joint venture with the Republic of Serbia that same year and renaming the company Fiat Automobili Srbija (FAS).
Fiat pledged €700 million in return for a 67 percent stake in the company (then owned by the state) and an additional €100 million investment by the Serbian government. This was later increased to €300 million. Fiat pledged not to cut jobs and to pay a backlog in wage payments, saying the plant would become a dedicated Fiat production site with a maximum production capacity of 330,000 units.
In the end, the financing consisted of an investment by the government of Serbia of more than €300 million, partially financed from credit of €500 million in credit given by European Investment Bank with Republic of Serbia guarantees for €300 million while €200 million of the same credit line guaranteed by Servizi Assicurativi del Commercio Estero (SACE).
While the joint venture contract is not publicized, Fiat is exempt from employee income tax and social security contributions, Serbia's profit tax for 10 years from the first year, and property taxes, among others.
In 2013, wages at Fiat were one fifth of Italian wages and one third of Polish wages. Kragujevac also offers beneficial transport links and close proximity to European markets. North American models are exported by rail and ship from the port of Bar, Montenegro.
When FAS became a subsidiary of Fiat Chrysler Automobiles in 2014, the factory was renamed FCA Serbia (FCAS).
Read the full text
The original joint venture agreement between Serbia and Fiat expired on 31 December 2018, but got renewed.
In 2018, FCA Srbija was Serbia's second largest (gross) exporter, at €714.1 — behind HBIS Group, owner of Smederevo Ironworks.
In 2021, following FCA merger into Stellantis, the Serbian company has been renamed Fiat Serbia.
From Wikipedia’s article on Fiat Serbia, shared under CC BY-SA 4.0.4