QUALITY WORKS SERBIA AUTOMOTIVE INDUSTRY Serbia Investment and Export Promotion Agency (SIEPA) is the government agency responsible for promoting FDI and export opportunities in Serbia. Companies wishing to establish or expand their operations in Serbia, can obtain tailor made services from SIEPA free of charge. www.siepa.gov.rs SERBIA INVESTMENT AND EXPORT PROMOTION AGENCY GENERAL DATA Official Name Republic of Serbia Form of State Democratic Republic Political Structure President Unicameral assembly with 250 seats CONTENTS Area 88,361 km2 Population 9.5mn South East Europe, central part of the Balkan Peninsula, at the intersection of Geographic Position Pan European Corridors No.10 and No.7 In the east, Serbia borders Bulgaria, in the northeast–Romania, in the north– Border Hungary, in the west–Croatia and Bosnia and Herzegovina, in the southwest– Montenegro, and in the south–Albania and Macedonia Temperate continental, with monthly average temperatures ranging between General Data Climate 0.7°C in January and 17.5°C in July Official Language Serbian 3 The Automotive Industry Trough the Years Main Religion Christian Orthodox Other Religions Roman Catholic, Islamic, Jewish, Protestant 5 Vehicles Manufacturer Profiles Belgrade: 1,576,000; Novi Sad: 298,000; 6 FIAT Serbia Major Cities Nis: 250,000 8 FAP Currency Dinar (RSD) 8 Neobus GDP (2007) 29.92 bn € 9 Zastava Special Vehicles GDP pc (2007) 3,971 € 9 Ikarbus Time Zone Central European Time (GMT + 01:00) 9 Zastava Trucks Internet Domain .rs 8 Analysis of Component Suppliers 11 Scope of Companies 11 Product Groups Helsinki 2083 km 12 Turnover and Exports Oslo 13 Workforce Features EU Countries 2109 km Tallinn Stockholm 2075 km Non EU Countries 2154 km 14 Company Size Info CEFTA 10th Pan–European Corridor 14 Capital Structure Riga 7th Pan–European Corridor 1768 km 15 Quality Management Systems 15 Languages Options Dublin Copenhagen 2435 km 1659 km Hamburg 1547 km 17 Investment Incentives Amsterdam Berlin 18 Financial Incentives London 1721 km 1255 km Warsaw 1982 km 1067 km Brussels Kiev 19 Tax Incentives 1672 km 1302 km Frankfurt 20 Free Trade Agreements Features 1282 km Prague 907 km Vienna Paris 612km 21 Workforce Guide 1766 km Stuttgart 1155 km Bratislava Munich Salzburg 578 km 930 km 797 km Zürich Graz Budapest 1175 km 23 SIEPA – Your Investment Facilitator 575 km 384 km Ljubljana Zagreb Milan 520 km 390 km 1009 km Bucharest 24 Index of Related Organisations Belgrade 641 km Marseille Sarajevo 1518 km 291 km Soa 403 km Skopje Barcelona Rome 423 km 1956 km Istanbul Madrid 1289 km 980 km 2566 km Tirana 612 km Thessaloniki 630 km Igoumenitsa 924 km Athens 1132 km 1939 1940 1941 1942 1943 1944 1945 Leading Foreign Investors in the Automotive Industry Company Country of Origin Investment Type Euro mn Fiat Italy Privatization 700 THE AUTOMOTIVE INDUSTRY THROUGH THE YEARS Cimos Slovenia Privatization 100 Michelin France Joint Venture 44 Brikel Bulgaria Privatization 37 1946 1947 1948 1949 1950 1951 1952 Galaxy Tire USA Privatization 22 Lohr Albon Great Britain Greenfield 18 The automotive industry in Serbia dates ing the UK and USA. Unfortunately, the CIMOS Leoni Germany Brownfield 15 Le Belier Draexlmaier Germany Greenfield 10 back to 1939 when the first trucks came off political problems and economic sanc- Lohr France Brownfield 7 Knott Streit Group France Greenfield 7 the assembly lines in the city of Kraguje- tions imposed on Serbia during the 1990s Tesnila Slovenia Greenfield 6 1953 vac. After 1954 the Second 1955 World War, this 1956 fac- halted 1957 the development 1958 of this export- 1959 Draexlmaier Grammer Germany Greenfield 4 Bauerhin Germany Greenfield 2 tory was renamed Zastava and it started oriented sector. The break-up of former CIMOS producing motor Yugoslavia had a big Bauerhin vehicles under the impact on Zastava’s Streit Groupe 1960 licence 1961 to FIAT. This 1962 1963 1964 existing 1965 supply 1966 Agena was a booming pe- chain, and econom- riod for automotive ic sanctions left it suppliers in Serbia, with a severely de- 1967 as many 1968 component 1969 1970 1971 pleted 1972 market. 1973 Ser- manufacturers were bian suppliers faced CIMOS Livar needed to support the same problems: Grah Automotive the growing new in- The industry was FIAT TPV dustry. Since Zastava confined to more or NTU 1974 1975 1976 1977 1978 1979 1980 Intertrust was working under less serving only the Styria strict FIAT quality Serbian market and Brikel standards, its suppli- reduced profits pre- Grammer 1981 ers had 1982 to adapt to 1983 1984 1985 vented 1986 companies 1987 Brikel them too. High qual- from investing in Leoni ity production en- the development of Michelin abled them to work technologies. for other western Since 2000, the 1988 car manufacturers. 1989 1990 1991 1992 Serbian 1993 automotive 1994 RS Partners Soon, companies industry has rapidly like Mercedes, Ford, re-emerged. Priva- PSA and Opel were tisation, a strong 1995 sourcing 1996 automotive 1997 1998 1999 influx 2000 of foreign 2001 Main airports components from Serbian companies. capital, and government support have com- Main roads The high point of this industry came bined with the experience of Serbian work- Main railroads in 1989 when Zastava produced roughly ers to achieve incredible success in an in- Main rivers 2002 250,000 2003 cars. Zastava 2004 cars were exported 2005 dustry which 2006 was completely 2007 stagnant 2008 just to 70 countries all over the world, includ- a few years ago. 2 Serbia Automotive Industry 2009 2010 2011 2012 2013 2014 Serbia Automotive Industry 20153 CURRENTLY 6 MOTOR VEHICLE MANUFACTURERS, 70 AUTOMOTIVE COMPONENT SUPPLIERS, 32,000 WORKERS, AND GROWING. Zastava Special Vehicles Neobus Ikarbus VEHICLES MANUFACTURER PROFILES In 2009, the automotive industry in Serbia FIAT Serbia consists of six companies manufacturing motor Zastava Trucks vehicles and around 70 component suppliers. The largest vehicle manufacturer is former Zastava Automobili or, as it is known now, the FIAT Serbia company. The production range of Serbian vehicle manufacturers consists of FAP passenger and commercial cars; and light, medium and heavy trucks and buses. Serbia also has companies that produce trailers, semi trailers or vehicle superstructures. A detailed analysis of these companies can be found in the component supplier section of this brochure. The six motor vehicle manufacturers in Serbia employed around 7,000 workers in 2008. Vehicle Manufacturers in Serbia 2008 Company name Location No. of Workers Product FIAT Serbia Kragujevac 3,400 Passenger Cars Zastava Special Vehicles Sombor 262 Commercial Cars Main airports Zastava Trucks Kragujevac 850 Vans, Trucks Main roads FAP Priboj 1,611 Trucks, Buses Main railroads Ikarbus Belgrade 764 Buses Main rivers Neobus Novi Sad 212 Buses Source: SIEPA 4 Serbia Automotive Industry Serbia Automotive Industry 5 BY 2011 – 300,000 NEW PASSENGER CARS/YEAR VEHICLES MANUFACTURER PROFILES VEHICLES MANUFACTURER PROFILES FIAT SERBIA At the end of the 1990s, the cornerstone of Serbian automo- Finally, in September 2008, the FIAT Group and the Serbian tive industry, Zastava Automobili, was in serious trouble. There Government signed a contract forming a new joint venture was almost no technical development, its market had shrunk company, FIAT Serbia. The FIAT Group invested €700 million severely, and annual production had fallen from more than in FIAT Serbia, while the Republic of Serbia contributed the 200,000 vehicles to around 20,000. Zastava Automobili plant along with an additional investment The democratic changes in Serbia in 2000 initiated the pri- of €200 million. The ownership structure of the company gives vatisation process of all state-owned companies. Zastava’s strat- the FIAT Group a 67% stake and the Republic of Serbia a 33% egy was to find a strategic partner among the leading global stake. The FIAT Serbia company will produce FIAT A and B vehicle manufacturers. To this end, numerous measures were segment passenger cars, and will reach production capacity of undertaken that would lead to one of largest investment proj- 300,000 vehicles a year by the end of 2011. ects in Serbia in the last 20 years. The FIAT manufacturing model requires the complete The first task was programme and personnel reconstruc- transformation of Zastava Automobili’s production process. tion at Zastava. As a whole, the Zastava company consisted of While Zastava had a number of in-house operations, like pro- many production plants, some of which were not only outside duction of transmission and braking systems, the FIAT model the main complex, but outside Kragujevac as well. Many such necessitates the involvement of door-to-door class A suppliers plants were separated from Zastava and privatised as indepen- for various components and systems. The city of Kragujevac dent companies. The reconstruction, supported by re-educa- will invest in the road, rail, gas and electricity infrastructure to tion and a compensation package for the workers, reduced the support this new project. It will also develop a 75 ha industrial oversized Zastava company that employed around 14,000 work- zone for class A suppliers to FIAT Serbia. Brands competing to ers during the 90s to around 3,400 in 2007. be class A FIAT suppliers are companies like Magneti Marelli, In 2005, the FIAT Group and Zastava signed a cooperation Johnson Controls, Faurecia, Lear Corp, Reiter and others. Local contract to assemble SKD cars in Zastava. To this end, the state suppliers are also expected to participate in the project, which invested around €10 million in a modern assembly line, where should also help boost the re-emergence of the automotive in- the FIAT Punto 2 was to be produced under the name of “Za- dustry in Serbia. stava 10.” By successfully producing around 10,000 Zastava “Our operations here will provide the Fiat Group with the means to widen its customer 10 vehicles per year while abiding by FIAT’s strict standards, base and to support its expansion and volume aspirations from a strategic region, Zastava indicated to FIAT that it could be transformed into a modern car manufacturing plant.