Postponement of strategic cooperation between Italian factory "Iveco" and "Zastava Trucks"

During the last week’s negotiations in Torino, which were attended by the representatives of the Ministry of Economy of Serbia, the officials of Italian factory "Iveco" and factory "Zastava Trucks” agreed that the validity of the Memorandum on forming of joint venture should be prolonged prior to March 2009. The first round of negotiations was ended on March 27th, while legal framework will be defined on April 6th in the Privatization Agency.

The Memorandum of understanding, which was signed on September 29, 2008, anticipates forming of a joint venture, 70% of which will be owned by Italians. By the way, "Iveco" already owns 34% of this Kragujevac-based factory. According to this special pre-contract, the Italian company from "Fiat Group" will be producing special fire and military vehicles in Kragujevac, and it will have a bus production factory built in industrial zone "Korman polje".

The participants in the negotiations in Torino agreed that "Iveco" and "Trucks" should resume commercial cooperation, which included equipping of two Kragujevac’s vehicles with Italian “euro 3” and “euro 4” engines, until the contract was signed.

The Kragujevac-based factory will be receiving components and body parts from "Iveco" factory in China because they are significantly cheaper than the other manufacturers of parts of this Italian factory.