* Cheaper model to be priced at 10,900 euro - report
* Fiat to hire 1,400 new workers in Serbia in 2013 and 2014
By Aleksandar Vasovic
BELGRADE, March 25 Serbia and Italian carmaker
Fiat have agreed on a subsidy deal to produce a cheaper
version of the 500L compact car for the domestic market, a
newspaper reported on Monday.
Under the deal, the Serbian unit of Fiat, based in the
central city of Kragujevac, will produce a version of 500L for
10,900 euro ($14,200) or about 3,000 euro less than its regular
price, the Blic newspaper said, citing Finance Minister Mladjan
The factory, a 1 billion-euro ($1.3 billion) joint venture
67 percent owned by Fiat and 33 percent by Serbia, will use
one-time government subsidy from the 2013 budget for 1,400 new
hires this year and next to produce the cheaper model.
The Fiat 500L is a stretched compact model of the Fiat 500
subcompact. It is already made in Serbia for export.
"The Fiat has pledged to hire 1,400 new workers ... for that
they will get subsidies of 10,000 euro per every new worker and
we have agreed that the company will use that money to produce a
version of 500L for the (Serbian) domestic market," Dinkic was
quoted by Blic as saying.
The Finance Ministry was not immediately available to
The Serbian government subsidises direct foreign
investments to help it emerge from recession and to combat
unemployment, which currently stands at about 25 percent.
Last week, Dinkic said subsidies would be disbursed on
condition Fiat secures local banks and leasing companies to
offer five-year deals at 3 percent a year in euros, the
preferred currency in the European Union candidate country.
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.
Earlier this month, Antonio Ferara, chief executive of
Serbia's Fiat plant said the company plans to produce between
110,000 and 180,000 of 500Ls for the markets in Europe and the
United States in 2013.
The Serbian factory last year produced about 30,000 500L
compacts after manufacturing started in July. Ferara said the
plant has increased its output rate since January.
($1 = 0.7694 euros)
(Editing by Jeremy Gaunt)