Page last updated at 15:56 GMT, Wednesday, 23 December 2009

Fiat takes over Zastava's Serbian factory

The new Fiat 500 was unveiled at the New York International Auto Show 8 April, 2009
Fiat now owns 67% of Zastava

Fiat has signed a deal to take over the Zastava car factory in Serbia.

Fiat, which now owns more than 67% of Zastava through the deal, plans to make up to 200,000 cars there per year.

The carmaker has made an initial investment of 100m euros (£90m;$143) and is expected to pay another 100m euros next year.

At the signing of the deal, Serbia's economy minister Mladjan Dinkic said production of two new Fiat models would be launched at the factory in 2011.

It is understood that these cars will be for export to Europe and the US.

The deal is part of a 700m-euro agreement signed by Fiat and the Serbian government last year.

Zastava is best known as the maker of the Yugo car.

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