Judging by production and export results from 2025, Kragujevac has once again, like four and a half decades ago, become an industrial centre and one of the engines of Serbia’s economic development.
Last year, companies in Kragujevac exported goods worth more than €1.8 billion, with a record foreign trade surplus of €517 million. By comparison, Serbia recorded a trade deficit of nearly €8.8 billion in goods exchange with the rest of the world, and in this century has only once, in 2022, seen a wider gap between imports and exports.
The results of Kragujevac’s enterprises carry additional weight because 80% of exports to foreign customers consist of cars, trams, railcars, parts for passenger and rail vehicles, and other finished high-tech products, 90% of which end up in markets such as Italy, Germany, and other EU countries.
At the same time, according to fDi Intelligence of the reputable Financial Times, Kragujevac, alongside Belgrade, Novi Sad, and Leskovac, is ranked among the four Serbian cities leading in attracting foreign investment. It has been recognised as an important investment destination thanks to its long industrial tradition, favourable geographic location, available economic resources, and reportedly good transport links. In addition, together with Sarajevo, it has been identified as a destination with the most favourable operating costs in the former Yugoslavia.
Over the past two decades, the city has become home to powerful and significant foreign companies, such as the multinational automotive giant Stellantis, the German rail vehicle manufacturer Siemens, the German-Austrian construction machinery producer Wacker Neuson, the Chinese automotive parts company Yanfeng, Slovenia’s Gorenje (part of China’s Hisense), and the German dairy company Meggle. More recently, the Czech company Škoda has announced plans to begin producing next-generation trams and trains there.
The bright and the dark side of the coin
Around 42,000 people are currently employed in Kragujevac’s economy, plus an unidentified but not insignificant number of workers from Nepal, India, Sri Lanka, Turkey, and other Asian countries. Additionally, between 12,000 and 15,000 people work in non-economic sectors, while over the past decade, unemployment has fallen by nearly two-thirds to around 8,000. It is not known, however, how many, especially young people, have left Serbia in search of work abroad, as the authorities do not disclose that information, though estimates suggest several thousand.
All these indicators of Kragujevac’s industrial revival represent the bright side of the coin. The darker side lies in the fact that since 2012, the ruling SNS has not brought a single new foreign investor to Kragujevac, despite President Aleksandar Vučić often emphasising that he has personally opened hundreds of factories across Serbia.
The state’s neglectful treatment of Siemens
The state’s attitude towards Siemens, after it took over the private firm Milanović Engineering in early 2018, previously its subcontractor, has, to put it mildly, been neglectful. So much so that the company is gradually shutting down tram production (with just one more series of 14 vehicles left to complete), leaving more than 150 workers without jobs, while dozens more will soon be placed on paid leave with salaries reduced by 35%.
Instead of purchasing from Siemens, the authorities in Belgrade opted to buy inferior and more expensive Turkish trams, each costing between €2.7 and €3 million. This decision accelerated the shutdown of tram production at one of the two plants in Kragujevac, with the company set to shift towards train production, expected to begin in the first half of 2027. Had Belgrade, as Vučić suggested in late 2018, purchased cheaper and higher-quality Siemens trams-costing €450,000 to €500,000 less per unit, there would now be no surplus workers in Kragujevac’s facilities, and there would have been sufficient work until train production began.
Kragujevac has also been largely bypassed by new motorways and expressways, and its railway infrastructure has not been modernised, something attributable not only to Vučić but also in large part to the long-serving Minister of Construction, Transport and Infrastructure, Zorana Mihajlović. Employees at Stellantis claim that both the city and the state were completely unprepared for mass production exceeding 600 cars per day.
As a result, hundreds of lorries and heavy trucks now thunder through the city streets, delivering materials and parts to factories located in the city centre and transporting finished products away. They also note that the authorities promised but failed to build the southern bypass and access road to the Fiat plant.
Despite the fact that Kragujevac has the largest foreign trade surplus in the country, the production of electric, hybrid, and petrol cars at Stellantis contributes to Serbia’s GDP growth, and cutting-edge technologies are used at Siemens, Wacker Neuson, and many other foreign-owned companies, the average net salary in Kragujevac in December 2025 stood at 115,648 dinars, below the national average.
The “dream threshold” of €1,000 remains out of reach for many, while the national average that month was €1,057. Moreover, many are affected by the fact that their wages are nearly half those in central Belgrade municipalities such as Stari Grad and Vračar, where averages exceeded 205,000 dinars, and significantly lower than in Novi Sad, where the average was 164,249 dinars.
In January this year, the average net salary fell to 118,429 dinars nationwide and to 113,548 dinars in Kragujevac. Notably, in that month, no municipality recorded an average salary above 200,000 dinars, whereas in December, three Belgrade municipalities – Stari Grad, Vračar, and Novi Beograd – had done so.
State subsidies attract foreigners, along with moderately skilled and low-paid workers
The civic association Novi Optimizam claims that wages in Kragujevac are below average because foreign investors come primarily for state subsidies and, even more so, for a workforce that is reasonably trained but poorly paid. As more local residents become unwilling to work for low wages, production in some foreign companies increasingly relies on workers from Nepal, India, Sri Lanka, and other Asian countries.
For months, Stellantis struggled to secure enough workers to operate at full capacity. It would never have managed without recruiting, through labour agencies, a large number of workers from Asian countries, officially around 500 in Stellantis plants alone, though unofficial figures are much higher. They perform the most demanding jobs for wages that many locals refuse to accept.
Even with overtime every Saturday, monthly earnings at Stellantis range between 90,000 and 100,000 dinars, roughly the same as at Siemens, Yanfeng, and elsewhere. Experience in developed countries shows that combining high technology with low wages is not a sustainable business model, raising questions about how viable such a system is in Kragujevac and Serbia. This is particularly true given that “imported” workers from poorer Asian countries are not trained for high-tech production.
Economic analysts point out that Serbia has largely neglected the development of small and medium-sized enterprises, which form the backbone of any prosperous economy. Kragujevac has around 290 such firms employing nearly 10,000 people, whereas plans from 2008 – when Fiat arrived – envisioned at least ten times as many. That target has not been met, as the state has shown little interest in encouraging the growth of domestic SMEs and entrepreneurship.
Economists note that achieving GDP growth of 5% – a rate Serbia last reached in 2008-requires investments amounting to 25% of GDP. For years, the state has allocated around 7–8% of GDP from the budget to public investment, with foreign investors contributing a similar share until last year. The remaining 10% should come from domestic companies, but they invest less than half of that, as the state does little to incentivise them – quite the opposite.
The result is that workers from poorer Asian countries will continue to come to work for foreign employers in Serbia, while Serbian workers will seek jobs in Germany, Austria, Switzerland, France, the Czech Republic, Slovenia, seasonally in Croatia, and perhaps soon in Romania.
(Radar, 28.04.2026)
https://radar.nova.rs/ekonomija/radnici-u-kragujevcu-kupci-plate/