At present the Zastava factory at Kragujevac builds the previous generation Fiat Punto under licence; from next year the first of two brand new models will roll off the production lines.

Fiat is "increasingly considering" selling cars it plans to manufacture in Serbia in the Russian market, a report says, reports B92.

Belgrade daily Večernje Novosti writes that the Italians, who when they first started negotiations with Sebia's Zastava carmaker insisted they would sell "95 percent of cars produced there in the EU market", while the rest would be offered to Serbian buyers, "have now changed their mind".

Serbia has a valid free trade agreement with the Russian Federation, allowing it to place most of the goods produced here to the Russian market custom duty free, that is, with one percent costs, prompting Fiat to deduce that its planned production in Kragujevac could make the company very competitive in Russia.

In the meantime, the strategic partnership contract between Fiat and the Serbian government will be ready for signing by the end of September, both sides are saying. An MoU on the same subject was signed in early May.

However, vehicles 1600 cc and below are not on the Serbo-Russian trade agreement list of customs exempt products. Therefore, the daily writes, once parliament ratifies the strategic oil and natural gas agreement with Russia, a mixed working group will meet, "with the sole goal of harmonizing a possible expansion of the existing free trade deal between Russia and Serbia."

Report courtesy of B92