Western car makers in Europe are experiencing difficulties making a profit due to rising costs of production in European countries.The famous compact car producer, Fiat has announced to hire more workers in Serbia, where it can produce 200,000 cars in a year.

Fiat is able to be successful in the car industry due to its high selling unique 500L family car. This compact sized offers strong points of differences when compared to the cars in the same size and functionality. Fiat is able to offer a small sized car, while keeping a slick design and good handling for its users. Fiat is also able to target a large segment of the population due to the variety of engine choices, appealing to different customer groups from the young population looking for a trendy, affordable car to a small family seeking for a convenient compact car.

Only 4 years ago, Fiat was about to go bankrupt but was saved  by Sergio Marchionne. Marchionne have been very successful trying to cut costs, including this move of relocating a factory and laying off workers. Fiat shows a great example of entrepreneurs changing its strategies, cutting costs in an appropriate manner in order to maximize its profits. Humphrey’s blogpost “Automating, Finally” Also illustrates this point.

http://www.economist.com/news/business/21588926-fiat-goes-east-lower-costs-balkan-legacy