Fiat agrees to rescheduled payments from Serbia for 500L plant
BELGRADE (Reuters) -- Serbia and Fiat have rescheduled payments by the cash-strapped Balkan country to the Italian carmaker for their joint car-plant venture in the central city of Kragujevac.
Serbia owns 33 percent of a 1 billion euro joint venture with Fiat to produce the Fiat 500L, a variant of the automaker's retro-styled 500 minicar. The first cars were produced in July at the plant, which is expected to employ 2,400 people and produce up to 200,000 cars annually.
Under the agreement, Serbia will pay 50 million euros ($63 million), or 55 percent of the 90 million it owes Fiat this year, once it has revised the 2012 budget in September. The rest will be paid in 2013.
"The problem is that the previous government failed to include payments to Fiat in the 2012 budget and now we will pay a part and reschedule the remaining 40 million euro to 2013," a government spokesman said on Thursday.
A new, Socialist-led coalition government took power in Serbia in July, inheriting a budget deficit of 7 percent of output and public debt of 54.7 percent.
The government also pledged to complete construction of a four-lane road linking Kragujevac and the nearby E75 pan-European highway. Rising costs and budget constraints have slowed the project.
"We will complete construction of the few remaining kilometers soon and we will do everything possible to make sure that the delay has no impact on production," the spokesman said.
Fiat CEO Sergio Marchionne is expected to visit Serbia next week for further talks, the spokesman added.
The 500L will join the 500 hatchback, Abarth performance version and 500C convertible as the fourth variant of the 500 minicar range. The 500L is due to go on sale in Italy and France in September, followed by the rest of Europe in October, with prices starting at 15,550 euros.
Sales in North America -- and possibly in Asia -- will begin next year.
Automotive News Europe contributed to this reportContact Automotive News