Will the passing of Sergio Marchionne affect Fiat’s operations in Serbia?

Production has been reinstated Fiat Chrysler Automobili Serbia (FCA), where about 35,000 Fiat vehicles were produced in the previous seven months.

But how will Fiat fare this year after its long-time CEO, Sergio Marchionne suddenly passed away on 25th July?

Not so long ago, it was announced the Board of Directors of FCA Group, replaced Marchionne with the American Michael Manley, who had achieved notable successes in the production, promotion and sale of that Chrysler brand.

However, what is quite noticeable is that nobody from the Serbian branch of Fiat had anything to say about the passing of Sergio Marchionne. Even the Serbian state officials kept mum, despite the fact that the Government of Serbia is a partner of the FCA Group in the management of the company Fiat Chrysler Automobili Serbia, in which the state of Serbia has a 33% share.

The surprising lack of reaction to Marchionne’s passing is even more shocking considering that it was Marchionne who, in 2008, decided to take Fiat back to Kragujevac and build a huge factory, worth $1.5 billion, on the foundations of the former Zastava car factory thus significantly contributing to the revival of the collapsed domestic automotive industry. It should also be remembered that Fiat, since 2004, when Marchionne was appointed CEO, began to record rapid growth in its car sales in Europe – in the period from 2004 to 2007, sales jumped from 600,000 to 900,000 cars.

That is why Fiat’s management decided to expand its production capacities to the countries of Eastern Europe, where production costs are lower. By the beginning of 2008, Fiat was negotiating the construction of a new factory with the authorities in Hungary, Romania, Bulgaria, Slovakia, and Russia. The U-turn in the company’s business expansion plans happened in early 2008, when Serbia ratified the Stabilization and Association Agreement with the European Union, creating prerequisites for the duty-free placement of products from Serbia to the EU markets.

Fiat’s management then realized that there was already a car factory in Kragujevac that was built with their money (in the 1960s, thanks to a $30-million-loan from Fiat). And so began the revival of the Serbian automotive industry…. The rest is history!

(Nova Ekonomija, 21.08.2018)



This post is also available in: Italiano

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