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Serbia to Ask Russia to Lift Customs Duty to Spur Auto Sales

March 13 (Bloomberg) -- Serbia will ask Russia to allow tens of thousands of cars made in the Balkan country to be imported without a customs duty of as much as 30 percent.

Cars weren’t included in a free-trade agreement the two countries signed in 2000 and Serbia hopes to change it to support its auto industry, including Fiat SpA’s Serbian plant and some 150 local suppliers, Finance Minister Mladjan Dinkic told a business forum in Kopaonik, Serbia, today. Serbian officials will hold talks in Moscow on April 10-11 on the issue, he said.

“We’ll try to negotiate quotas, starting maybe with a few tens of thousands of cars a year” to be sold customs-free, he said. If an agreement is reached, Serbia may seek a gradual increase to “possibly 50,000, maybe 80,000 units or more.”

Fiat Automobili Srbija, a joint venture between the government and Italian carmaker Fiat, is Serbia’s sole automaker, “but an agreement with Russia would be very beneficial for other investors and for those who are considering coming to Serbia,” Dinkic said.

With the current customs, vehicles made in Serbia are “not sellable in Russia from the economic standpoint,” said Antonio Ferrara, the head of the Fiat venture in Serbia.

The plant producing 500L compact wagons already makes some units for the Russian market, but “volumes are completely different” under customs-free conditions, he said.

To contact the reporter on this story: Misha Savic in Belgrade at msavic2@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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