KRAGUJEVAC, Serbia, April 16 Italy's Fiat on Monday unveiled its new 1-billion-euro production line in the Serbian industrial town of Kragujevac, where the carmaker's 500L model will be produced for sale by late 2012.
The opening reprsents a much needed campaign boost for President Boris Tadic's Democratic Party, the largest party in Serbia's ruling coalition, ahead of presidential and parliamentary elections on May 6.
Presenting the first production model of the 500L -- a larger five-seat version of its Fiat 500 minicar -- Fiat CEO Sergio Marchionne said the new plant would create some 2,400 jobs once it is fully operational by end-2012.
"Today marks the completion of more than three years of preparations. This plant is being completely renegineered and turned into a cutting edge facility to Fiat and Chrysler standards," Marchionne said.
The joint venture -- 67 percent owned by Fiat and 33 percent by the Serbian state -- represents a total investment of some 1 billion euros ($1.31 billion).
The new production line will be able to churn out 200,000 Fiat 500L cars per year.
The Kragujevac plant once produced the much-derided Yugo car and was damaged by NATO bombs during the Kosovo war of 1999. Since 2009 it has been producing Fiat Punto compacts.
The Serbian government is struggling to maintain growth and rein in rising unemployment as it heads into an election in May, with Tadic's Democratic Party trailing in polls behind the opposition populist Serbian Progressive Party.
($1 = 0.7644 euros) (Editing by David Cowell)