BELGRADE (Serbia), April 2 (SeeNews) – Austria’s Erste banking group said it expects a drop in the output of the car factory of FCA Srbija in Kragujevac will curb Serbia’s industrial production growth in 2019.
The factory of FCA Srbija, a joint venture of Italy’s Fiat Chrysler Automobiles Group and Serbia’s government, produced 7,000 cars in the first two months of 2019, versus the usual 10,000 for the period, Erste analysts said in a comment on Serbia’s most recent industrial output data last week.
It is still unclear whether the Kragujevac factory will get a chance to start production of a new SUV model this year, Erste said.
“Without the new model production, output from FCA will inevitably decrease compared to previous year thus weighing on industrial production.”
Moreover, the Kosovo tariff issue and a reduced growth prospects in key export markets can also have a negative impact on Serbia’s industrial output, Erste said.
Serbia’s industrial production increased 2.4% year-on-year in February, after declining 5.5% in January, statistical office data showed last week.
On November 21, Kosovo government increased import tariffs on all goods produced in Serbia to 100% from 10% set earlier that month, saying the move aimed to protect Kosovo’s sovereignty and interests.