Serbia is providing slightly more than €5 million in state incentives to Chinese automotive supplier Huizhong Automobile Chassis System for an investment of at least €33.5 million at its facility in Kać near Novi Sad. The project covers production equipment and chassis components and represents the first European manufacturing plant of parent company Shanghai Huizhong Automotive Manufacturing (SHAC).
Under the investment agreement, the company is required to create at least 50 additional jobs by the end of 2029. The state support amounts to roughly 15% of the committed investment. SHAC has confirmed that components manufactured at Kać will be supplied to BMW, with potential cooperation with other European automotive manufacturers.
SHAC establishes first European production site
SHAC is part of China’s HASCO automotive-components group and operates manufacturing facilities serving global vehicle producers. The Kać plant covers approximately 19,000 square metres, with additional expansion planned. It is designed to bring SHAC’s production closer to European customers rather than relying on component shipments from China. The location can shorten transport times and provide closer production links with European vehicle manufacturers, as the automotive industry adjusts its supply chains and invests in electric vehicles and new vehicle platforms.
Chinese automotive suppliers have increasingly established production operations closer to European customers, while Serbia provides a manufacturing location outside the EU with connections to Central European automotive markets.
State incentives support industrial investment
The investment agreement provides a direct measure of Serbia’s financial support for the project, with slightly more than €5 million allocated against a minimum investment commitment of €33.5 million. The project also includes a commitment to create 50 additional jobs, while the manufacturing operation is expected to involve capital-intensive production equipment. The economic effects of the project include production, exports, taxation, potential domestic procurement and future investment associated with expansion of the facility.
BMW supply adds European automotive links
The confirmed supply relationship with BMW connects the Kać operation directly to a European vehicle manufacturer. Components supplied to automotive manufacturers are subject to requirements covering quality, traceability, manufacturing processes and delivery reliability.
The plant can therefore create potential links with companies providing machining, tooling, plastics, metal processing, logistics, automation, maintenance and engineering services. The extent to which Serbian companies participate in those activities will determine how closely the new production operation is connected with the domestic industrial base.
Chinese automotive investment broadens
The SHAC project forms part of a broader expansion of Chinese automotive investment in Serbia. Earlier major Chinese investments in the country included projects in infrastructure, mining, metals and tyre manufacturing, while newer projects have included more specialised automotive-component operations.
In May, Serbia announced agreements with Chinese companies covering automotive and technology investments involving SHAC, Minth, BMTS Technology and Xingyu Automotive, alongside additional projects involving Linglong and Yusei. These projects add to the presence of Chinese automotive suppliers operating from Serbia and supplying international vehicle manufacturers.
Serbia positioned between Chinese and EU supply chains
The investment places Chinese manufacturing capital and technology within a production system connected to European automotive demand. Serbia is simultaneously seeking Chinese investment and pursuing economic and institutional integration with the European Union, making automotive projects linked to European manufacturers an important component of its industrial investment strategy. The Kać facility’s confirmed supply relationship with BMW establishes a direct connection between the Serbian plant and European automotive production. The project commitments currently include at least €33.5 million of investment, slightly more than €5 million in state support and at least 50 additional jobs, alongside the planned production of chassis components for European automotive customers.
