By Brendan Moore
Fiat’s CEO, Sergio Marchionne, has committed to purchasing a majority stake in Zastava Automobili, according to a statement issued from the office of Boris Tadic, president of Serbia.
Serbia and Fiat ginned up a 700 million euro ($1 billion USD) joint venture early last year, in which the Turin-based manufacturer acquired 67 percent of the Zastava carmaker, while the government in Belgrade kept the remainder.
Fiat has held off on actually writing the check for their part of Zastava, though, because of last year’s swoon in the wordwide auto market, leaving the nascent joint venture to be financed and operated by Serbian government aid.
According to Tadic’s office, Fiat will make the first payment of 100 million euros before the end of 2009, and then make quarterly payments against the balance going forward.
Zastava is not a familiar name to many people in North America, but their former progeny, the Yugo, holds a special place in the annals of cheap car history for some. The Yugo was a former Fiat model.
In that same vein, Fiat did allow the Zastava factory to produce the Fiat Punto under license, which they did, to the tune of 15,000 units, in 2009. The agreement called for the cars to be offered for sale only in Serbia and the Bosnian Serb sector of nearby Bosnia. All of the cars were snapped up by buyers in those areas.
Zastava Automobili is Serbia’s largest auto manufacturer.
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