Fiat and Serbia Close Deal for Cheaper 500L Model for Domestic Market image

Serbia and Fiat have closed a deal on a subsidy to manufacture a cheaper 500L model for the domestic market.

Serbia and Fiat have made an agreement according to which the Italian automaker will make a cheaper version of the 500L model, priced at around 10,900 euro ($14,200), which would be with 3,000 euro less than the vehicle’s regular price.

The plant in Serbia, which is 67% owned by Fiat, will be offered a one-time government subsidy from this year’s budget for 1,400 new jobs and the production of the next cheaper 500L model. The Fiat 500L, which is a stretched version of the Fiat 500 minicar, is already manufactured in Serbia for export to other markets.

“Fiat has pledged to hire 1,400 new workers … for that they will get subsidies of 10,000 euros per new worker and we have agreed that the company will use that money to produce a version of the 500L for the [Serbian] domestic market,” said Finance Minister Mladjan Dinkic.

Antonio Ferara, chief executive of Serbia’s Fiat plant, said earlier this month that Fiat plans to manufacture this year between 110,000 and 180,000 500L vehicles for the US and European markets.