Fiat’s joint venture factory in Serbia, founded in 2008, could produce up to 180,000 500L units this year for export to the US and Europe.

"Due to the crisis of the international car market we are in the production range of 110,000 to 180,000 units," Antonio Ferara, chief executive of Fiat Automobile Serbia, told reporters.

Last year the former Zastava plant in Kragujevac produced about 30,000 500Ls after build started in July. The state-owned factory produced rebadged Fiats from the 1950s. In 2008, Fiat and Belgrade launched a EUR1bn (US$1.3bn) joint venture which is 67% owned by Fiat and 33% by the government; it represents the largest industrial investment in Serbia.

"We are producing a little bit more than planned... so if the trend remains over the next two or three months we will increase the production steadily, not through overtime, but through hiring (more workers)," Ferara told Reuters.

The company has previously announced it will start production of an off-road model as well as right-hand drive versions for UK buyers; another version aimed at the US is expected in the second half of the year.

A seven seat version 500L will be added at the end of May, said Ferara.