Serbia car industry from the origin to the 2012.

The Serbia republic is trying to emerge after over 20 years of wars, internal conflicts and international isolation due to heavy infraction to civil rights. The independence of Kosovo regions still is an open issue while in recent years, wishing to improve the economy, the government operated to improve international relations, signing a Stabilization and Association Agreement with Brussels in May 2008, and with full implementation of the Interim Trade Agreement with the European Community in February 2010, followed by the recent candidate status request.

Serbia is also pursuing membership in the World Trade Organization, and accession negotiations are at an advanced stage. Structural economic reforms needed to ensure the country’s long-term prosperity have largely stalled since the onset of the global financial crisis.

However, Serbia is slowly recovering from the crisis with the GDP flat in the period 2009-2011. The country is facing high unemployment and stagnant household, high government expenditures for salaries, pensions and unemployment benefits, a growing need for new government borrowing and rising public and private foreign debt.

The Serbian automotive sector born after the end of Second World War, when in the 1954, near the city of Kragujevac, the car production was started by a local company, the Zastava, under Fiat Auto licensing. In the following decades Zastava was able to attract others primary brands, such as Ford, Opel and Mercedes. In the eighties, Zastava recorded over 250.000 vehicles annually produced and exported in over 70 countries worldwide using the Yugo brand.

The break-up of former Yugoslavia had a massive impact on Zastava supply chain and ongoing sanctions left its market severely depleted. In 1999, during the Kosovo War, NATO bombed the Zastava Automobiles plant in Kragujevac, Serbia because it was considered a threat since Zastava Arms infrastructure was also located on site. Nevertheless, the bombing did not completely halt the production, while some of the car manufacturing buildings were damaged and numerous workers were injured.

In the following years the production started again and the company recovered production and sales. The last Zastava branded vehicle rolled off the assembly line on November 21, 2008. Indeed, in that year it was founded a joint venture, Fiat Automobiles Serbia (FAS), between Fiat (at 67% of share) and the government of Serbia (33%) with over € 900 million invested to renovate the plant and start new products production. In August 2012, FAS started the production of the new Fiat 500L.

The car market dropped in the ’90 hit by economic collapse and wars. In the early 2000 progressively recovered and the all-time record volume was posted in the 2007, when 56.231 units were sold in the country. The following year the market slightly declined while in the 2009, when the Serbian economy was hit by the international crisis, the car market started 3 years of decline. In the 2011 the car sold were only 31.777, down 43% from the record year.

In the 2012, as the Serbian economy is not progressing and level of unemployment improving, the car market is falling again, with full year projected below 25.000 units.

However, the start of Fiat 500 L production in August could be the first stone for future development and market recover.

Looking at the brands competition in the market, we will deeply analyze the trend in the next report over Serbia. Actually we wish to mention the dramatic changes in the market. After more than 50 years, the old Zastava, now FAS, in not the market leader after 6 months of sales in 2012. The new leader is Skoda, a small player 5 years ago and now able to outpace many others, including Volkswagen, Renault and Dacia.

In the table below, the all-brands ranking, ordered by First Half 2012 position:

Rank

Brand

2010

2011

I Half

2010

2011

Q1

Q2

1

Skoda

3.252

3.719

1.821

8,4%

11,7%

13,1%

15,2%

2

Fiat Auto. Serbia

11.763

4.717

1.195

30,2%

14,8%

7,6%

10,8%

3

Volkswagen

2.146

2.014

1.145

5,5%

6,3%

9,6%

8,5%

4

Hyundai

2.525

2.393

1.014

6,5%

7,5%

9,4%

6,8%

5

Dacia

3.383

2.562

893

8,7%

8,1%

7,7%

6,4%

6

Ford

1.583

2.063

817

4,1%

6,5%

6,4%

6,4%

7

Opel

2.635

2.134

810

6,8%

6,7%

5,4%

7,1%

8

Renault

1.867

1.779

802

4,8%

5,6%

7,3%

5,5%

9

Chevrolet

1.453

1.482

503

3,7%

4,7%

3,5%

4,3%

10

Kia

730

701

496

1,9%

2,2%

3,0%

4,6%

11

Fiat

83

1.413

385

0,2%

4,4%

3,6%

2,5%

12

Toyota

1.258

956

366

3,2%

3,0%

3,2%

2,6%

13

Lada

0

234

347

0,0%

0,7%

2,2%

3,1%

14

Mercedes

763

741

282

2,0%

2,3%

2,2%

2,2%

15

Audi

450

488

274

1,2%

1,5%

2,0%

2,2%

16

Nissan

355

491

225

0,9%

1,5%

1,7%

1,8%

17

BMW

387

404

223

1,0%

1,3%

1,8%

1,7%

18

Honda

328

307

216

0,8%

1,0%

1,9%

1,5%

19

Suzuki

572

394

206

1,5%

1,2%

1,7%

1,5%

20

Peugeot

1.005

749

179

2,6%

2,4%

1,5%

1,4%

21

Seat

311

268

131

0,8%

0,8%

1,4%

0,7%

22

Mazda

542

315

117

1,4%

1,0%

1,2%

0,7%

23

Chery

0

122

53

0,0%

0,4%

0,3%

0,5%

24

Volvo

72

78

38

0,2%

0,2%

0,4%

0,3%

25

Mini

44

74

35

0,1%

0,2%

0,3%

0,3%

26

Mitsubishi

50

252

33

0,1%

0,8%

0,2%

0,3%

27

Jeep

89

48

30

0,2%

0,2%

0,2%

0,2%

28

Land Rover

32

88

27

0,1%

0,3%

0,2%

0,2%

29

Smart

0

48

27

0,0%

0,2%

0,2%

0,2%

30

Alfa Romeo

7

55

26

0,0%

0,2%

0,1%

0,3%

31

Citroen

983

519

22

2,5%

1,6%

0,4%

0,0%

32

Lancia

1

20

15

0,0%

0,1%

0,1%

0,1%

33

Subaru

92

40

13

0,2%

0,1%

0,1%

0,1%

34

Porsche

31

39

9

0,1%

0,1%

0,1%

0,1%

35

Infiniti

0

1

5

0,0%

0,0%

0,0%

0,0%

36

Dodge

58

16

1

0,1%

0,1%

0,0%

0,0%

37

Lexus

18

18

0

0,0%

0,1%

0,0%

0,0%

38

Chrysler

11

12

0

0,0%

0,0%

0,0%

0,0%

39

Hummer

0

0

0

0,0%

0,0%

0,0%

0,0%

40

Isuzu

1

6

0

0,0%

0,0%

0,0%

0,0%

41

Mahindra

15

11

0

0,0%

0,0%

0,0%

0,0%

42

Saab

14

9

0

0,0%

0,0%

0,0%

0,0%

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