Giovanni de Filippis, Director of Fiat Automobili Srbija - We will invest EUR 940 million by end of 2011

(Giovanni de Filippis)

We have so far invested EUR 150 million in reconstruction of the plant and about 150 companies and suppliers from Serbia are engaged in that project. Numerous parameters show it is a big project - as if a brand new city was being built, and that can be seen now. However, the biggest job over the past few weeks has been done on the route from Italy, via Germany, all the way to Japan, where Fiat's experts have chosen a new equipment for the plant in Kragujevac. I have recently signed agreements on procurement of machines worth EUR 400 million, which represent a cutting-edge technology in the world automotive industry.

This is how Giovanni de Filippis, the CEO of Fiat Automobili Srbija, explains for Novosti daily paper the first bigger steps toward construction of the Italian-Serbian automobile factory and adds that EUR 940 million will be invested in the plant by the end of this year.

Can it now be said with certainty that the new model of automobile will appear in the market at the end of this year? According to announcements we have been hearing to date, production of the other model will start one year later?

- Both models (with five and seven seats) will be launched in the fourth quarter of this year. We are sure that the quality and price will make them competitive in the global market in their class. We count on export of 95% of the production right from the start.

We have learned that projected production capacities of certain units amount to up to 500,000 vehicles?

- Our current plan is to make a plant where 200,000 vehicles will be produced on annual basis. But I must admit that the plant is projected to easily adapts to a much bigger production of, let's say, 300,000 automobiles a year - without a problem.

What is exactly being done in the plant and which space has the priority in the equipping with new technologies?

- We are currently reconstructing 400,000 square meters of office space, which is a demanding job. In numerous cases, it was easier to build brand new facilities. The halls were built in the 1950's and 1970's and they should be adapted to the latest principle of production in the world. We are today making a modern plant that can compete with the group's most modern plants. And one of the first and most expensive jobs is reconstruction of the "lacquer shop". We will start working on that in three months.

When do you plan to hire new workers?

- We will be hiring new people every month and we should have at least 2,433 workers until 2012. Everything goes as planned. Our biggest problem at the moment is how to improve skills and competence in order to meet international standards. Two years ago, people we found here were willing to work but their technical knowledge was the same as 20 years earlier. We are now organizing expert trainings in order to overcome that obstacle.

Your list of suppliers currently includes 150 companies from Serbia. Who are they and what do they do?

- Apart from contractors, there is also a big number of suppliers on that list. It is hard to list them all. When you say that Serbian companies have been supplying us with, let's say, containers and pallets, one can get an impression that these deals are not big, but we are talking about multimillion contracts in euros.

What is the situation with suppliers of spare parts and when will your partners arrive?

- Until three or four years ago, not a single company from Serbia had been able to compete on international level. The situation is now much better. Most of them will, as suppliers, join our international companies that will be built in the location of the barracks in Grosnica by the end of the year. That location suits us because it is only few hundred meters away from the factory grounds. Right from the start, that Supplier Park will host six or seven companies from Italy and other countries.

Punto, export and reduced subventions?

- Thirty percent of all vehicles sold in Serbia are Punto cars. Punto is still the most cost-efficient vehicle in the market. Our export to the markets of northern Africa and eastern Europe is stable. It is important to us to expand our service and sales networks, which will also be used in export of new models, starting from the new Crysler model - Freemont.

- We are not worried because the government subventions are now smaller. We have agreed to lower the interest rate for loans with the seven-year repayment period - to 4.25%. Besides, we have also extended the guarantee period from two to three years and we are the only company in Serbia to offer "road assistance". Thanks to that model, after two decades, Serbia again registers a somewhat bigger export of automobiles, but we see that as an introduction to what is going to happen with Serbia's export balance thanks to new models.

At the Car Show in Belgrade

At the next Car Show in Belgrade, we will for the first time have an opportunity to exhibit the complete range of products we offer - from Fiat's smallest car to all-terrain vehicle - says Giovanni de Filippis.

- The focus will be on Lancia Ypsilon, Fiat 500, with a brand new engine, new Grand Cherokee, and Giulietta, with a new 140 horsepower engine.

Kragujevac - the center of Serbia

You spend at least two days a week in Kragujevac?

- I have an impression that, judging by the rate at which it develops, Kragujevac is almost becoming the development center of Serbia, but I do not think that such development is backed by private investments to an appropriate extent.

(Note: complete text is taken from the daily paper Novosti of January 31, 2011)