In the 1970s and early 1980s my family’s yearly vacation trip from Southern Germany to Greece involved a grueling 36 hour trek through the infamous “Auto-put”: Maribor-Ljubljana-Zagreb-Belgrade-Nis-Skopje-Evzoni. The trip was hazardous, always an adventure. To fill our car in “socialist Yugoslavia”, we had to buy gasoline vouchers upfront at the border.
We drove a Fiat 132 which served us well during these long road trips. These memories came back to me when a World Bank team recently visited the brand new FIAT car factory in Kragujevac, two hours South of Belgrade. This is a high stakes investment for FIAT and a strong signal for Serbia’s dormant manufacturing. The factory is producing the new 500L (in several different variants), a modernized version of its legendary Cinquecento. Early this October, the company and the factory celebrated the first anniversary of the 500L’s regular production. During that year, some 100,000 units were produced, overwhelmingly for export around the world, including to the USA. As a result FIAT is now Serbia’s largest exporter (over a billion euros’ worth -15% of total exports of goods from Serbia- in the first three quarters of 2013 ). Just two years before, exports of vehicles amounted to 2% of total exports (see figure). Today, Kragujevac is producing 600 cars daily and has created more than 3,000 jobs with the potential for more. Importantly, a network of suppliers is springing up, both in Kragujevac, as well as in other towns in Serbia.