YUGO 128

From top to bottom: Fiat 128 assembled under licence by Zastava, the Punto Mk2 is currently being assembled at the Kragujevac factory; Yugo 45s going down the assembly lines in the 1980s; and the original Fiat 500 was built by Zastava, badged as the 750.

The very last Zastava branded cars will roll of the creaking production lines in Kragujevac, Serbia, today, bringing to an end just over half a century of car manufacturing tradition as the national company prepares for a new chapter of its life under Fiat ownership. During that period Zastava has established a very close relationship with Fiat Group, building a string of its models under licence, such as the 128, Punto and original 500, or by using the Turinese firm's engines and transmissions to power its own models, such as the Florida.

Now Fiat will absorb Zastava into its global manufacturing operations, pumping in 700 millions euros to build a brand new factory from the ground-up which will have a capacity of 200,000 units per year from late 2010.

Zastava - Serbia's national automobile manufacturer - is based in the town of Kragujevac, just over 80 miles south of the Capital Belgrade. The Zavodi Crvena factory (which means  'Red Flag Plant') began its long collaboration with Fiat just over fifty years ago (in 1955) when it began assembly of the Fiat 1300, 1400 and 1900 models for sale in what was then Yugoslavia, as well as the other countries that made up the 'Eastern Bloc' group of nations.

In the 1960s Zastava began  building the Fiat 600D - which was badged as the 750 - and remained in production until 1981. Zastava's most popular - and commercially successful - was the 4-door 55bhp Fiat 128 saloon, which started production in 1971, and although it suffered from terrible early build quality problems, it is still built today. The Zastava 101 (the local designation for Fiat's 128) was part of a new agreement with Fiat. Zastava also created a hatchback
version, and both variants were exported to Italy and sold under the 'Innocenti' name.

The company introduced the 'Yugo' brand name, and in the 1980s Yugo began to raise their quality standards and started to export - cheap, simple and reliable - cars into Western European markets. The Yugo 45 - based around the Fiat 127 - was the most popular export more than 100,000 were imported into the United States. Their final production model before the wars - the Yugo Sana which was launched in 1990 - was styled by no lesser designer than Giorgetto Giugiaro.

The regional wars of the early 1990s which saw the Yugoslav nation torn apart crippled the economy and the Yugo had all but vanished from the Western European markets by 1993. The factory was bombed by NATO during the Kosovo war at the end of that decade, causing extensive damage.

Zastava resumed car production in 2000 (when 15,000 cars were assembled and of these 4,000 were exported) and they have struggled on in recent years, still continuing to build a version of the Fiat 128, as well as developing several new models, including the reasonable successful 2.0-litre Yugo Florida (which uses Fiat's 2.0-litre unit drawn from the Brava/Bravo). Most recently a rebadged series 2 Punto has been assembled, reviving the tradition of building Fiats under licence and paving the way for the new agreement. Around 11,000 cars left the factory last year.

The brand new factory will start building cars from next year and will have a maximum capacity of 200,000 units a year once it is up-to-speed building two new models in 2010, a low-cost sub-B-segment hatchback dubbed the 'new Uno' and, the Topolino, a small city car to be badged by Fiat and Lancia, will replace the Yugo-branded models emerging from the factory.

2008 Interfuture Media/Italiaspeed