2013-07-07 20:20:50 - New Transportation research report from Business Monitor International is now available from Fast Market Research
Although we expect a modest recovery this year - we forecast GDP growth will rise 1.9% in 2013 - Serbian households are set for another difficult year in 2013, weighed down by fiscal austerity measures and high unemployment. The government's 2013 budget caps increases in public sector wages well below inflation, while it also hikes the VAT rate by two percentage points. These factors will curb vehicle sales.
Italian auto manufacturer Fiat announced in March 2013 that it expects production at its Serbia factory to reach between 110,000 and 150,000 units in 2013 following strong output levels over the last few months. BMI maintains a bullish outlook for the site, predicated on strong sales growth in Europe, despite the regional sales
downturn, and expansion in higher-growth markets globally. Further, production at the site is competitive.
US firm Johnson Controls, which makes seat components for car interiors for FAS, has also opened a second facility in Kragujevac.
Fiat will continue investing in the site, and expects to add a further 600 jobs in 2013 on the back of increased output. The automaker made 30,000 500L cars in 2012 following the start of manufacturing in July 2012.
Full Report Details at
The Kragujevac site is jointly owned by Fiat and the Serbian government. The site benefits from low wages, tax breaks, and government subsidies.
Production at the site is predominantly for export to Western Europe, where sales have generally been weak. In the first two months of 2013, passenger car sales in Europe declined 9.5% year-on-year (y-oy). BMI has become increasingly bearish on most of these market, and we expect many to remain weak over the year (see our online service, March 20, 'Regional Sales Downturn Set To Continue').
In this period, Fiat Group's total sales in the region declined 14% y-o-y. We expect Fiat, along with many other mass market manufacturers, to continue to struggle in the region (see 'Fiat Credit Rating Downgrade Commensurate With BMI View', February 27). Despite the company's downturn, sales of the 500L model are more robust, however, which has served to boost production at the Serbia site. We expect this trend to continue, as the downturn in European sales moderates somewhat over the year.
From June 2013, the 500L model will be on sale in the US, which should also serve to boost demand. Indeed, BMI maintains a generally bullish outlook for passenger car sales in the US. Further, a potential expansion of an existing free trade agreement (FTA) between Serbia and Russia to include autos exports would allow Fiat to access this high-growth market, which would serve to boost demand (see 'BMI View Playing Out As Sales Moderate', March 1).
When Serbia's Ministry of Finance and Economy announced with the first batch of 3,000 500L models was being prepared to be shipped to the US, it revealed that the automotive industry has become the fastest growing industrial branch in the country.
Serbia's exports increased 22% y-o-y in the first quarter of 2013, according to the Ministry of Finance and Economy. It said this was mainly thanks to the exports of Fiat Automobili Srbija and the exports of automotive parts produced in over 150 plants in Serbia.
Report Table of Contents:
BMI Industry View
- Business Environment
- Table: Serbian Automotive Production And Sales, 2010-2017
- Passenger Vehicles
- Economic Analysis
Industry Risk Reward Ratings
- Europe - Risk/Reward Ratings
- Table: BMI Industry Risk/Reward Ratings For Autos In Europe
- Company Monitor
- Table: Pirelli European Production Sites
- Table: Pirelli Global Sales And Financial Distribution By Region
- Zastava Automobile
- Europe Overview
Global Industry Overview
- Table: Passenger Car Sales, February 2013 (CBUs)
- Japan Slides, North America Divided
- Tough Start For Europe
- Taxing Times For Brazil
- Demographic Outlook
- Table: Serbia's Population By Age Group, 1990-2020 ('000)
- Table: Serbia's Population By Age Group, 1990-2020 (% of total)
- Table: Serbia's Key Population Ratios, 1990-2020
- Table: Serbia's Rural And Urban Population, 1990-2020
- Automobile Industry
About Business Monitor International
Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
For more information about these or related research reports, please visit our website at www.fastmr.com
or call us at 1.800.844.8156.