Serbia cranks up production of Fiat's new 500L cars

Wed Mar 13, 2013 2:35pm EDT

* Factory to produce between 110,000 and 160,000 cars

* Model for U.S. market to roll out in June or July

* Production of seven-seat model to start in late May

By Aleksandar Vasovic

KOPAONIK, Serbia, March 13 (Reuters) - The Serbian unit of Fiat plans to produce between 110,000 and 160,000 of its new 500L family of compact cars for the Italian firm's markets in Europe and the United States this year, a key boost for Serbian exports, the head of the factory said on Wednesday.

Serbia expects a 25 percent rise in the value of its exports this year to around 11 billion euros ($14 billion) with the automotive industry accounting for about 20 percent of the total including production from the Fiat plant in the central city of Kragujevac.

The 1 billion-euro ($1.3 billion) joint venture project which was hatched by the government in Belgrade and Fiat in 2008 is 67 percent owned by Fiat and 33 percent by Serbia.

"Due to the crisis of the international car market we are in the production range of 110,000 to 160,000 units," Antonio Ferara, chief executive of Serbia's Fiat plant, told reporters on the sidelines of a three-day national business conference being held in the southwestern ski resort of Kopaonik.

The Serbian factory last year produced about 30,000 500L compacts after manufacturing started in July and Ferara said the plant has increased its output rate since January with staff working some overtime.

"We are producing a little bit more than planned ... so if the trend remains over the next two or three months we will increase the production steadily, not through overtime, but through hiring (more workers)," Ferara said.

The company earlier announced it will start production of an off-road model as well as a right-hand drive version for buyers in the United Kingdom.

Another version aimed at the U.S. market is expected in the second part of the year.

"The roll-out (of the U.S. model) is foreseen for June or July, we are setting the right date, but everything is going strictly in line with the schedule," Ferara said.

The production of another, seven-seat version of the 500L family of vehicles for the European market is expected to start by the end of May and its launch is expected in July, he said.

Meanwhile any plans to export 500Ls to Russia remain uncertain due to high custom duties there. Although Serbia has a free-trade agreement with Russia it excludes cars and on Wednesday Serbia's Finance Minister Mladjan Dinkic said that a high ranking delegation will travel to Moscow to try to resolve the issue. ($1=0.7722 euros) (Editing by Greg Mahlich)