22.09.2005 Fiat and the Serbian-based carmaker Zastava, have finally signed a licensing deal that will see the Fiat Punto assembled in Kragujevac

Fiat and the Serbian-based carmaker Zastava, have finally signed a licensing deal that will see the Fiat Punto assembled in Kragujevac. The agreement was signed yesterday by Zastava President, Zoran Radojevic, and Gilberto Ranieri on behalf of Fiat, with the Serbian Minister of Economy, Predrag Bubalo, in attendance.

Radojevic said that the Serbian carmaker would now invest 15 millions euros in the new project, with assembly projected to start in between nine and twelve months time. However, before production began at Zastava's factory in Kragujevac, Fiat would export 7,000 Puntos that would be assembled in Italy over the next few months and badged by the Serbian company. In the meantime Zastava staff would also attend training sessions in Turin.

Annual assembly of the Punto in Serbia will be targeted at around 16,000 units, creating around 1,000 extra jobs for the struggling carmaker, which has fought with difficulty to get back on track after the spate Balkan wars in the 1990s, and then the extensive damage that was caused by NATO bombings in 1999, reduced production to a trickle. Prior to the disintegration of Yugoslavia in 1991, the company hit annual production of 120,000 cars, which were then sold under the Yugo name.
 

The spate Balkan wars in the 1990s, and then the extensive damage that was caused by NATO bombings in 1999 (above), reduced Zastava's annual automotive production to a  trickle

Fiat and Serbian firm Zastava, have finally signed a licensing deal that will  see  the  Fiat  Punto  assembled  in  Kragujevac


The new car - which will be known in Serbia as the 'Zastava 10' - is set to cost between 8,000 and 9,000 euros. The carmaker also aims to export the Punto to its neighbouring countries including Macedonia, Romania, Croatia, Bosnia and Albania. Fiat wouldn't reveal financial details of the new deal, but said that it covered existing debts that Zastava still owe to Fiat Auto from previous licensing projects. Ranieri also commented that "the deal was a continuation of long-standing cooperation, which would give Zastava an opportunity to expand its product in both the country and the region."

Predrag Bubalo, the Serbian Minister of Economy, suggested during the signing deal yesterday that if Zastava could prove successful in assembling the new car efficiently it would become a candidate to attracting a new strategic partner to assist it with a privatisation process.
 

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2005 Interfuture Media/Italiaspeed