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Magneti Marelli builds Serbian auto parts plant

By: Richard Higgs

September 25, 2012

MILAN, ITALY (Sept. 20 12:45 p.m. ET) — Italian auto supplier Magneti Marelli SpA is investing 60 million euros ($77.6 million) to establish a new production plant in Serbia.

The firm, part of the Fiat Group, intends to manufacture car parts for 200,000 vehicles a year at the new facility planned for the Serbian city of Kragujevac, southeast of Belgrade.

Magneti Marelli signed an agreement with the Serbian government and local authority earlier this year for the new plant. The contract stipulates that the company should include lines for plastic parts production.

Under the agreement, Serbia is to ensure the new factory is built in an industrial free zone and will provide financing of 10 million euros, as well as investment incentives 800 euros for every new employee. The Kragujevac city authority committed to provide the venture with local tax incentives and provide the site with the necessary infrastructure.

In April, Fiat opened what is the largest auto manufacturing plant in southeastern Europe, on the site of the former national Zastava car assembly plant in Kragujevac.

Magneti Marelli subsidiaries manufacture a wide range of auto components including powertrain, electronic, exhaust and suspension systems. It produces plastic components and modules including vehicle dashboards, central consoles, bumpers and fuel supply systems. It is also involved in the development and production of exterior vehicle lighting products.

The firm has 83 production facilities and a dozen R&D centers. It is present in 18 countries in Europe, Asia and North and Latin America supplying many of the major vehicle manufacturers.

Fiat Automobiles Serbia (FAS) expects to employ around 2,400 at the Serbian production site by the end of the year.