Electric Panda could contribute a whole percentage point to Serbia’s economic growth

On July 11th, the promotion of the new Fiat Grande Panda model, which will be manufactured in Kragujevac, in the factory where the 500L model was produced until 2022, is scheduled to take place in Turin.

The launch of production will increase domestic motor vehicle production and employment, merchandise exports, and gross domestic product, assessed Ivan Nikolić, the editor of Macroeconomic Analyses and Trends (MAT), in an analysis of the potential effects of starting the production of the electric Panda in Serbia.

Nikolić reminds that the Fiat Grande Panda model will be available in hybrid and fully electric versions and will be the first model from Fiat’s new global line of vehicles based on a multi-energy platform that allows for various propulsion technologies, as well as the first to be available in the markets of Europe, the Middle East, and Africa.

He also notes that at this moment it is difficult to quantify the undoubtedly direct and indirect positive effects of starting production of the new model in Kragujevac, especially to draw an analogy with the production of the previous 500L model, but he still presented some calculations.

“The weighting factor of the Motor Vehicle and Trailer Production segment for the calculation of industrial production in 2024 is known and amounts to 3.85. If by any chance we repeated the production growth of this area as we had in 2013 compared to 2012, the direct positive effect on total industrial production would be about 5.5 percentage points on an annual level. Consequently, the gross domestic product (GDP) would also realistically increase by about 1.1 percentage points, assuming that the growth in physical volume is equal to the growth in added value,” Nikolić assessed in the analysis published in the latest edition of MAT.

He warns, however, that the current placement of small electric vehicles (EVs) on the global market is not entirely comparable to the sale of internal combustion engine vehicles from ten years ago, because EVs are relatively new on the market, their sales are influenced by factors such as subsidies, charger availability, or regulations, and the competition is incomparably stronger—especially when it comes to China, which has meanwhile become the world leader in both battery and electric vehicle production.

Massive Competition in the EV Market

These very factors were highlighted in a recent interview for Biznis.rs by Dušan Marković, a professor at the Faculty of Economics in Belgrade, pointing out that our electric Panda is precisely the type of vehicle most exposed to competition from China.

“China is today superior when it comes to electric vehicle production, and concerning the European market, the greatest competitive pressure from Chinese manufacturers can occur in the segment of vehicles like those that will be produced here, which are cars produced for the ‘mass market’,” stated Professor Marković, who has been following the development of Chinese corporations and their position in the global arena for a decade.

He also assessed that Europe is facing a major decision that boils down to the question of whether to impose additional tariffs on Chinese vehicles and close its market to them, which, as he points out, could lead to the closure of the Chinese market to European companies.

Nikolic reminds that there have been hints that subsidies for purchasing the Fiat Grande Panda could go up to 5,000 euros per vehicle.

“The total allocated fund for subsidies will certainly depend on the overall domestic demand for this model, which directly determines the individual subsidy per vehicle,” Nikolić pointed out.

He also noted that the most popular small European electric cars in recent years have been the Renault Zoe, Volkswagen ID.3, Peugeot e-208, Fiat 500e, and MINI Electric.

“As for Stellantis, 65,000 units of Fiat 500e were sold in Europe last year, and 66,732 units the year before. Peugeot e-208 also sells well and is the leader in the B BEV segment in the European market. However, the key problem with the market placement of small European BEV vehicles remains the price, with some models being up to 57 percent more expensive than those with internal combustion engines,” Nikolić warned.

(Biznis.rs, 09.07.2024)

https://biznis.rs/vesti/srbija/elektricna-panda-mogla-bi-da-doprinese-privrednom-rastu-srbije-za-ceo-procentni-poen/

This post is also available in: Italiano

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