Boston, MA -- (SBWIRE) -- 04/10/2014 -- Although the domestic autos market in Serbia is far from developed, we believe the Serbian autos production segment is set to establish its reputation as a highly competitive manufacturing base in the Eastern European region over the coming years. Its proximity to high potential markets such as Russia, improving export ties with the EU and the hefty investments from Fiat will be key factors helping the production segment recover to pre-1999 levels.

Even by our modest forecast of 1.6% year-on-year (y-o-y) average annual growth between 2014 and 2018, we expect autos production to reach 28,000 units by the end of our forecast - more than double the levels in 1999. 2013 was a crucial year for the Serbian autos exports segment. With Fiat beginning exports of its Serbian-made cars to the US market from June 2013, Serbian total exports are expected to have expanded by an impressive 25% y-o-y, to EUR11bn in 2013. Car exports alone are expected to stand between EUR1.5bn and EUR2bn.

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It is, therefore, not surprising that international suppliers and carmakers are rushing to establish their presence in the still immature market.

Johnson Electric will offer employment to 1,050 people as of July 2016 at its new plant in Serbia, reports Balkans.com, citing the country's Deputy Prime Minister Aleksandar Vucic. The company is expected to supply the world's leading automotive automakers, including Volvo, BMW and Jaguar. The plant produced its first products in September 2013 and aims to employ 250 people in 2014.

German auto supplier Grammer has opened a second plant in Serbia, at a redeveloped site in the town of Aleksinac in the south east of the country, reported Plastic News. Grammer produces seat headrests for the likes of Audi, BMW and Fiat at its original Serbian plant, where it employs 740 staff. The new facility, which will turn out armrests, side linings and door pads, will create 120 jobs, rising to 500 jobs by mid-2015 as the plant grows. The firm received incentive support equivalent to EUR7,000 (US$9,565) for every new job it created in a deal signed with Serbia's economy minister Mladjan Dinkic in July 2013.

In October 2013, Finnish auto cable company PKC Group explained that it intends to open a production facility in the Serbian city of Smederevo. The Memorandum of Understanding was signed between the representatives of PKC, the Serbian government and the government of Smederevo city and the project will represent an investment of EUR8mn (US$10.94mn) by 2016 and will employ 1,500 workers. The project is also supported by SIEPA, the Customs Administration and the Free Zones Administration.

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