Italian carmaker Fiat opened a production line in Kragujevac, Serbia, for the new family version of its popular 500 city car on Monday.
Fiat hopes to sell about 160,000 hatchbacks a year produced in this central Serbian town, which was selected to take advantage of low wages, tax breaks and government subsidies.
The Italian carmaker said the four-door 500L the L stands for Large multipurpose vehicle is designed to be “generous” in its size and features, and ecological and simple to drive.
Fiat and Chrysler chief executive Sergio Marchionne, who attended the opening ceremonies for the factory, said the car was set for an autumn launch and was designed to appeal to markets on both sides of the Atlantic. The basic price per car is set to be 16000.
This factory is more than a modernised factory,” Marchionne said. “We wanted to turn this region (of Serbia) into a region that will attract more (foreign) investment.” Fiat and the Serbian government have a 67-33 per cent share respectively in a joint company, Fiat Cars Serbia. Some 1 billion ($1.3 billion) was reportedly invested in the refurbishing and equipping of the old Zastava car factory in Kragujevac for the new Fiat production line.
By the end of 2012, some 2,400 people will be employed at the plant plus 1,000 with suppliers, Fiat said. Once fully operational, the plant will have a production capacity of up to 200,000 cars a year.
The old factory in Kragujevac used to produce Yugo a boxy little model that was considered the worst quality car ever imported in the US during the 1980s.
Niche Italian luxury carmaker Maserati, owned by Fiat, aims to make 10 times more cars by 2015 as it expands its range to include a sports utility vehicle and a new high-end sedan aimed at US consumers.
Maserati’s move into higher-volume cars follows Fiat’s purchase of a majority stake in US automaker Chrysler, and is part of an industry-wide trend towards luxury SUVs.
The company said it aims to sell 50,000 cars annually by 2015. Maserati made 5,675 cars in 2010 at a factory near Bologna, where it was founded in 1914.
Maserati will double its number of dealers by 2014, its marketing director Massimo Farao’ said at the Geneva car show last month.