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

  • Jaguar XF Sportbrake TDV6
    First Drive
    19 October 2017
    The handsome Jaguar XF Sportbrake exhibits all the hallmarks that makes the saloon great, and with the silky smooth diesel V6 makes it a compelling choice
  • Volkswagen T-Roc TDI
    First Drive
    19 October 2017
    Volkswagen's new compact crossover has the looks, the engineering and the build quality to be a resounding success, but not with this diesel engine
  • BMW M550i
    First Drive
    19 October 2017
    The all-paw M550i is a fast, effortless mile-muncher, but there's a reason why it won't be sold in the UK
  • Volvo V90
    First Drive
    19 October 2017
    The Volvo V90 is a big estate ploughing its own furrow. We’re about to see if it is refreshing or misguided
  • Kia Stonic
    First Drive
    18 October 2017
    Handsome entrant into the bulging small crossover market has a strong engine and agile handling, but isn’t as comfortable or complete as rivals