VW could migrate manufacturing to Serbia
27 March 2008

Serbia’s state-owned carmaker, Zastava, which once sold cars in the UK under the Yugo brand, could be bought by Volkswagen. Representatives from the German company visited the Zastava factory before Easter to assess its suitability for purchase. The Serbian Government, which owns 99.9 per cent of the car maker, has already made clear it intends to privatise it.Zastava has a huge factory in Kragujevac, which once produced 250,000 cars a year but is expected to build just 18,600 this year, split between its own ancient models (one of which is based on the 1969 Fiat 128) and licence-produced versions of the previous generations of the Fiat Punto and Opel Astra.Western car makers are interested in the facility because it has the size and potential to build serious volumes of cars. The factory is in poor condition, but Zastava has a trained workforce of around 5000 and plenty of car-building and engineering experience. However, this workforce is also heavily unionised, reducing their attractiveness to external car makers when compared with the creation of a brand-new, plant – as has happened with numerous new factories in Poland, Hungary, Slovakia and the Czech Republic. If Volkswagen does take over Zastava it could prove integral to rumoured plans to migrate manufacture from the company’s German factories – something that is already causing a major debate within Germany. Fiat, Tata and Chinese maker FAW are also interested in Zastava but GM has reportedly pulled out of talks. The deadline for bids is April 15.

Dan Stevens

Add your comment

Log in or register to post comments

Find an Autocar car review

Driven this week

  • Range Rover Sport SVR
    First Drive
    22 March 2018
    More power and an intoxicating soundtrack have breathed new life into our love affair with the biggest, baddest Range Rover Sport variant
  • First Drive
    21 March 2018
    The new Vantage has been developed as a Porsche 911 beater, and our first taste on UK roads suggests it can live up to that bold claim
  • Nissan Leaf Tekna
    The is the new Nissan Leaf
    First Drive
    21 March 2018
    The new version of the world's best-selling electric car gains a bigger battery and more power. How does it compare to rivals such as the Volkswagen e-Golf?
  • Range Rover p400e
    First Drive
    20 March 2018
    The original luxury SUV is now available as a plug-in hybrid, promising lower emissions and the capacity for silent electric motoring
  • BMW i3s
    Car review
    20 March 2018
    Revised hatchback sets out its range-extended electric stall in a new, sportier tune