Belgrade: University of Belgrade, Faculty of Organisational Sciences Gligorić Matić, Mirjana Marković, Dušan info:eu-repo/semantics/article Abstract: Since the 2008 Great Recession, the EU automotive industry has faced disruptions from technological changes, the COVID-19 pandemic, and shifting global regulations. These challenges weakened financially strained EU carmakers. In response, many pursued mergers, acquisitions, and outsourcing to lower-cost labor markets on Europe’s periphery. While these countries benefited from foreign direct investment, the current EU automotive crisis is slowing their growth and forcing economic strategy reconsideration. Fiat’s investment around 2010 triggered significant growth in Serbia’s automobile production, with exports peaking in 2013. Although motor vehicle exports later declined, the sector remains vital to Serbia’s overall exports and has been bringing substantial foreign investment, driven by relatively low labor costs. However, the initiation of electric vehicle production this year carries substantial promise, but its impact on Serbia’s export performance and GDP growth in the foreseeable future remains uncertain due to adverse external conditions. Given the importance of Serbia’s automotive sector in production and exports, attracting additional technology-intensive foreign direct investments is essential for long-term growth, innovation, productivity gains, and deeper integration into global value chains. This would accelerate economic growth and help Serbia converge with more developed countries. eng application/pdf 1078265 bytes All rights reserved International Symposium on Operational Research, SYM-OP-IS 2025, Palić, 7-10. septembar 2025 startpage: 106 endpage: 111 2025 Keywords: Automotive industry, Europe, Supply chain, Serbia, Crisis. THE CRISIS IN THE EUROPEAN AUTOMOTIVE INDUSTRY AND ITS IMPACT ON SERBIA’S ECONOMY https://phaidrabg.bg.ac.rs/o:37208 ISBN: 978-86-7680-494-8