Belgrade - Italian car maker FIAT and Serbia's Zastava automobiles Wednesday signed an agreement on forming a joint company in which the Italian firm will own majority of stakes. FIAT's vice president Alfredo Altavilla and Serbian Economy minister Mladjan Dinkic signed in Belgrade a memorandum under which FIAT will invest 700 million euros in the factory and own 70 per cent of the shares, while Serbia will invest 100 million euros and own 30 per cent.
FIAT plans to start manufacturing new class A model by 2009 with a production of 200,000. By 2010, FIAT should also start production of a class B model which would boost entire production in Zastava to 300,000 vehicles a year.
FIAT and Zastava began their cooperation in 1950s with the production of Fiat 500 car model. Around million of these automobiles were manufactured in Zastava between 1955 and 1985.
