Production under licence of the Fiat Punto Mk2b by Zastava, which is known as the Zastava 10, will get underway at the firm's assembly plant at Kragujevac later this week. Currently it is being built in Italy and imported to Serbia. A ceremony will be held, attended by Serbian dignitaries and government representatives, to mark the occasion.

Fiat has held a long association with the former Yugoslavian national carmaker, with Zastava assembling a range of Fiats under licence from 1955 across the second half of the last century, including models such as the 1100, 600D and 128. However the Balkan wars during the early years of the 1990s saw car production cease after the factory was bombed by NATO.

In October 2005, once provision had been made to settle outstanding debts that Zastava owed to Fiat, a new agreement was reached which sees the Serbian firm building the Fiat Punto Mk2b under licence. The first stage of the agreement saw the B-segment car being assembled by Fiat at its Mirafiori factory in Turin, badged as a 'Zastava 10', with the Serbian factory staff assisting Fiat's own workers as part of a training programme.

In the meantime a 15 million euro investment has seen the factory at Kragujevac, located 130 km southeast of the capital Belgrade, being prepared to assemble the Zastava 10. “Half of the sum has been spent on the purchase and installation of production equipment,” said Zastava Cars Director Zoran Mogdanović, with most of the funds coming from the privatisation of some Zastava Group companies and from sales of the Zastava 10 to date. Since the war, car production at Kragujevac has slowly climbed back to around 9 percent of pre-war levels of over 200,000 units per year, the new Zastava 10 model will double the current output.
 

Currently there are around 4,000 employees at the Kragujevac plant. As well as selling the model domestically, Zastava is already exporting the Turin-built version to other Balkan and Eastern European markets, with annual sales being targeted at 16,000 units. During the opening months of this year the Zastava 10 has steadily increased its Serbian market share to over 10 percent.

Visually identical to the Punto Mk2b, the Zastava 10 is differentiated by its 'Zastava Auto' badges on the front grille, tailgate, hub caps and steering wheel, as well as 'Zastava 10' written on the tailgate. One body style is available, a 5-door hatchback, and one engine, Fiat's Euro IV compliant 1.2-litre petrol, which achieves 136 g/km CO2 emissions. This package allows the Zastava 10 to achieve maximum power of 60 bhp at 5,000 rpm and maximum torque of 102 Nm at 2,500 rpm. Top speed is 155 km/h while 0-100 km/h is reached in 14.3 seconds. It has 14-inch wheels with 165/70R tyres and a 5-speed gearbox. The Zastava 10 comes in the Fiat Punto's 'Active' trim specification, while optional equipment includes two front airbags, climate control and electric-powered windows.

Mogdanović sees this week's commencement of production at Kragujevac as heralding the start of the rebirth of the Serbian car industry. Zastava is also currently talking to GM's Opel division about assembling one its models under licence and the Serbian government is currently preparing to privatise the state-owned carmaker, by a private tender process, at the end of this year.