Iveco will sign an agreement with the the Serbian government to acquire Zastava on the same day as Fiat Group; the plan will see Iveco continuing truck manufacturing and adding bus production as well as building a all-new factory.

Iveco will sign an agreement with the Zastava factory on the same day as Fiat, B92’s sources say. Iveco will manufacture buses in Kragujevac, and according to the plan, the production of buses will increase, which was confirmed to B92 by Kragujevac Mayor Nebojša Zdravković’s deputy.

The Fiat and Iveco investments will be the largest investments in Serbia since the democratic changes of October 2000. Iveco will sign a memorandum on strategic cooperation with Serbia, the details of which will be defined later, according to the mayor’s deputy, who is also a member of the negotiating team.

While Zastava workers had feared that production of trucks would be shut down, Iveco will, in fact, be increasing production. It was agreed that Zastava would start producing buses too. A brand new factory will also be constructed, though it is not yet clear whether the factory will be used for producing trucks or buses. Fiat and Iveco are expected to invest altogether over EUR 1bn, which will be the largest investment in Serbian industry thus far.

“I don’t know the details of the contract, so I cannot talk about figures, but it is very possible that there will be a parallel signing—that the agreement will be signed on the same day as the one with Fiat,” Italian Ambassador to Belgrade Alessandro Merola said. The agreement with Fiat is scheduled to be signed on September 29.

“I have received information that Iveco wants to, as part of the agreement with Fiat, join the large-scale automotive production by manufacturing buses,” Merola said. This was also hinted at by the Economy Ministry, which stated that Fiat officials had relayed their investment plans to Iveco and other companies within the Fiat Group. The Ministry added that it had also determined that the investment plans needed to be drafted immediately and that over a thousand new jobs would be created. Iveco recently asked for 20,000 hectares of land to build a new factory.

Report courtesy of B92