Vice President of carmaker Fiat Alfredo Altavilla and Kragujevac, Serbia Mayor Veroljub Stevanovic yesterday signed a Memorandum of Understanding under which the Italian carmaker will be exempt from paying taxes in the next ten years. Photo: Zastava currently assembles the Fiat Punto Mk2 under licence.

Vice President of carmaker Fiat Alfredo Altavilla and Kragujevac, Serbia Mayor Veroljub Stevanovic yesterday signed a Memorandum of Understanding under which the Italian carmaker will be exempt from paying taxes in the next ten years.

Under the memorandum, the Fiat Group will get free land to expand its production capacities in Kragujevac. Stevanovic said that this is a dream coming true after over 50 years for citizens of Kragujevac.

Altavilla said that the signing of the agreement on cooperation with Zastava is a very important day for Fiat Group as this is one of the company’s biggest global strategic projects. He noted that two new models will be manufactured in Kragujevac and marketed worldwide.

Serbian Deputy Prime Minister Bozidar Djelic said that the plan to produce 300,000 vehicles per year in Zastava is a serious one, but that the final goal is to produce 1 million vehicles per year in Serbia. Djelic said that Serbia’s agreement with the EU and the agreement with Fiat are connected, and added that this is a huge step for Kragujevac, Sumadija and Serbia.

Serbian Minister of Economy and Regional Development Mladjan Dinkic said that this day is the beginning of the development of the entire car industry of Serbia, and the confirmation as well that a transformation is possible in Serbia. Just as Kragujevac was proclaimed the capital of Serbia 190 years ago, today it has become the center of the automotive industry in southern Europe, Dinkic underlined. He said that a Fiat delegation will visit Zastava’s factory of pick-up vehicles in Sombor in order to examine the production possibilities of that plant. According to Djelic, by the end of 2009 production of a new model of Fiat will begin in Kragujevac, and the city is expected to host the world debut of the new car within a year and half.

Serbian President Boris Tadic said that Fiat’s return to Kragujevac and Kragujevac based Zastava is only the beginning of the revival of the entire Serbian industry, and added that strategic partnership between the two companies will create 10,000 new jobs in Serbia. Serbia is the driving force of development in the whole of South East Europe and is inhabited by a nation which can initiate development not just in the region, but throughout Europe, said Tadic.

State officials reached the Kragujevac fairgrounds, where the memorandum was signed, in a procession of 30 Fiat cars, accompanied by prominent personalities, and the procession was led by actor Dragan Nikolic in an old model of Fiat. Earlier, at an official session of the Kragujevac city assembly, awards were presented to citizens for promoting Kragujevac. Also present at the special session were delegations of 12 twin cities from abroad, diplomats and the Bishop of Sumadija.

Report courtesy of Economy