Serbia is providing more than €8 million in state incentives for two manufacturing projects worth a combined €43.6 million, with investments by Chinese-owned Huizhong Automobile Chassis System and Slovenian-owned Elrad WS-S. The projects require the companies to invest at least €33.5 million and €10.1 million, respectively, while creating a combined minimum of 265 permanent jobs. The two agreements also show different approaches to state support. Incentives cover about 15% of Huizhong’s investment, compared with almost 30% for Elrad.
Huizhong expands automotive production near Novi Sad
Huizhong, wholly owned by Shanghai Huizhong Automotive Manufacturing (SHAC), is establishing its first European manufacturing operation in the industrial zone at Kać near Novi Sad. The project covers equipment and production capacity for automotive chassis systems. The investment agreement requires at least €33.5 million in investment and 50 permanent jobs by the end of 2029.
Serbia will provide €5.03 million in incentives. The facility covers around 19,000 square metres, with BMW among the customers expected to receive products from Serbia. The project places SHAC’s production closer to European vehicle manufacturers and integrates the Kać operation into European automotive supply chains.
Elrad expands existing Serbian operation
Elrad WS-S, part of Slovenia’s Elrad Group, is undertaking a brownfield investment linked to its manufacturing operation in southern Serbia. The company produces wiring sets, electrical equipment and related components for automotive and industrial applications. Its Serbian operation employed an average of around 531 people in 2025 and generated approximately RSD 2.97 billion, or about €25 million, in revenue. Under the new agreement, Elrad will invest at least €10.1 million and add 215 permanent jobs by the end of 2028. Serbia will provide €3.015 million, representing just under 30% of the committed investment.
Different investment profiles
The two projects have substantially different capital and employment profiles. Huizhong is committing almost three times as much capital while creating 50 jobs, whereas Elrad’s smaller investment is tied to more than four times as many new positions. Both projects contribute to Serbia’s expanding automotive supplier base, which includes manufacturers of tyres, wiring systems, electric motors, lighting, metal components and electronics.
Recent investments by Xingyu, SHAC, Minth and other suppliers have added to the country’s network of companies serving European vehicle manufacturers. Chinese automotive investment has also become more specialised, with companies establishing production facilities designed to supply European original equipment manufacturers directly.
State aid linked to industrial expansion
The projects illustrate different uses of investment incentives, from capital-intensive manufacturing and export capacity to employment creation and expansion of existing industrial operations. For Huizhong, the project combines new production equipment with integration into European automotive supply chains. For Elrad, the investment expands an established manufacturing operation and adds 215 jobs in southern Serbia. The projects also increase the role of local suppliers, engineering, maintenance and logistics services in determining the wider industrial impact of new manufacturing capacity.
