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Warsaw takes major step to secure Magna’s car making project


2012-07-09



The councillors of Warsaw have voted unanimously to approve a temporary property-tax holiday for Magna International, the global diversified auto parts maker that has been in talks about restarting car production at FSO, the troubled Warsaw auto manufacturer. According to the resolution, Magna will in return pledge to invest at least €100m in FSO and to create minimally 1,000 jobs, including at least 35 in research and development.

The councillors’ decision to grant the tax holiday (until the end of 2013) is crucial for the ongoing negotiations between Magna and the Ministry of Economy. In April MPs were told that Magna was prepared to invest PLN 1-1.2bn (approx. €235-282m) and create 5,000 jobs at FSO to produce even 200,000 vehicles a year, but the group expects incentives from the Polish government, including reportedly a PLN 90m (€21.2m) investment grant and income-tax holidays.



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