Serbia’s automotive industry is generating new activity across component manufacturing, engineering, logistics and business services as vehicle exports strengthen in 2026. Motor vehicles have been among the country’s strongest export-growth contributors this year, providing support amid weaker industrial demand across Europe. The expansion is linked partly to the Stellantis operation in Kragujevac, where production of the Fiat Grande Panda family has established a new export platform. The effects of automotive investment are extending beyond vehicle assembly, with new manufacturing capacity and associated business operations developing in other industrial locations.
New component production in Čačak
German automotive supplier PWO Group has opened a 16,500-square-metre factory in Čačak producing advanced lightweight components, including parts for electrified vehicles. The project represents an investment of approximately €31 million and includes a new €15 million European Investment Bank loan. The company expects the facility to create up to 550 jobs by 2033. The Čačak site also houses a Shared Service Centre supporting PWO’s European operations, combining industrial production with services for the wider group.
The model allows foreign industrial companies operating in Serbia to combine manufacturing with activities such as procurement, engineering support, finance, IT, supplier management and administrative services.
Broader automotive supply chain
Automotive investment is also generating demand for tooling, moulds, industrial automation, surface treatment, quality assurance, warehousing, transport and maintenance. The shift towards vehicle electrification is adding further areas of production and services, including lightweight structures, battery systems, electronics, power management and software. These components and technologies represent an increasing share of vehicle value and are expanding the range of activities connected with automotive manufacturing in Serbia.
Exposure to European vehicle markets
Serbia’s automotive industry remains closely connected with supply chains in Italy, Germany and Central Europe, leaving production exposed to changes in European vehicle demand, competition from Asian manufacturers and the transition from internal-combustion vehicles to electric vehicles.
Another factor is the level of domestic localisation. Facilities that import most machinery and components and then re-export finished products can generate employment and exports without producing the same level of activity across the domestic supplier base. The expansion of automotive manufacturing therefore creates potential demand for a wider network of component suppliers, industrial-service providers, engineering centres, test laboratories, automation integrators, renewable electricity procurement and export logistics. The development of these activities would extend automotive investment beyond individual production facilities and into the wider industrial and services network surrounding them.
