The Fiat Punto production line at the Zastava factory in Kragujevac will be officially opened today signifying the start of a new era of Fiat production operations in Serbia. The first 30 examples of the Fiat Punto MkII (Project 188) rolled off the assembly lines yesterday and a further 120 units will be completed by the end of the week.

The Fiat Punto MkII was assembled by Zastava under licence, badged for sale as the 'Zastava 10', until the tail end of last year when production ceased as the Serbian carmaker prepared for its takeover by Fiat, and with it a huge injection of new investment to prepare the aged factory to produce two all-new models: the low-cost sub-B compact car dubbed the 'Uno' that will replace the Palio family, and the Panda-based 'Topolino' small urban car. However the global financial crisis intervened in the meantime and its effects has seen Fiat drastically scaling its ambitious plans for Serbia back.

In the meantime production of the Punto MkII is resuming in Kragujevac; however it will mean for the first time a Fiat badged model will be built in Serbia as the Zastava 10 designation has been dropped, thus signalling a new era in the country for Fiat. Around 50 engineering staff from Turin have been brought over by Fiat to oversee the resumption of production and to achieve a higher standard of quality than was achieved with the previous Zastava 10. Components for the Punto are being brought from Italy to Kragujevac by train. "Everything is being manufactured in Zastava Car as elaborated by Fiat experts," one of the supervisors Giancarlo Fabaro told Blic yesterday. "Every little detail is checked since the quality has to be supreme. There is no problem at the moment and the production is getting into rhythm."

At the moment the plan is to produce around 2,000 units by the end of May, all destined for the Serbian market, with a year-end target of 15,000 units. However a government scheme to trade in older cars for the new Punto with subsidies has attracted an astonishing 19,000 applicants already and Zastava are preparing to ramp production up to 30,000 units this year if the demand calls for it.

Today Fiat senior managers led by Giovanni de Filippis the managing director of Fiat Cars Serbia, the company formed by Fiat to takeover the Zastava operations, and a former boss of Fiat India, will arrive at the factory to oversee the official opening of the Punto production line which will denote a new chapter for Fiat of building its own brand cars in a country that has had long and very close links with the Italian automaker.