Autoblog

If you told us a year ago that Fiat was going to sign a deal with the government of Serbia, we'd have laughed. But that was before the country announced that it was accepting tenders for investment in the state-owned automaker Zastava, makers of the famous Yugo (aka Skala 55). The process started back in December when the Serbian government made the announcement, sparking interest from various automakers. But even as recent as last week, the Fiat stance was that it was still considering the proposition. Well, it appears the Italian auto giant has done thinking, and has signed a memorandum of understanding with Serbia to establish a joint venture that involves Fiat investing a staggering 700 million euros (!) into Zastava's manufacturing facilities in exchange for a majority stake in the company, known in full as Zavodi Crvena Zastava. The Serbian government, meanwhile, will contribute some 200 million euros through tax incentives and similar measures.

Fiat has revealed that it will use the Zastava plant to produce the upcoming Topolino microcar. The vehicle will be based on the same platform as the 500 and Panda, but even smaller and positioned below either model, and share the same name as the concept car that previewed the new 500 and originally used on the 1936 runabout pictured above. According to reports, the new Topolino will be a compact two-seater measuring just 3150mm (124 inches) in length, slightly longer than the Smart ForTwo at 2692mm (106 inches). A four-seater version is expected to follow, in addition to an upscale version for the Lancia division.

[Source: Automotive News Europe – sub. req'd]

Click above for more pics of the Zastava Skala 55

It was just the other day that we looked back at the automotive punchline that was the Yugo in America. In all actuality, though, the Serbian automaker Zastava that's currently for sale, has plenty to offer prospective buyers. This fact is evidenced by reports that Volkswagen is considering bidding on the ex-Yugoslavian company. Zastava is the only automaker based in Serbia, and has a number of factories and excess production capacity which could prove rather useful to companies such as Volkswagen, which is looking to expand their production capabilities in Europe.

Zastava currently produces a line of vehicles based on licensed Fiat architecture. The plant is currently producing about 15,000 units per year, but is capable of building as many as 60,000. At this time, we're not aware of any official offers being made, but we're sure that if Volkswagen is looking, others likely are as well.

[Source: B92, Carscoop]

Click above for more pics of the Zastava Skala 55

The Easter holiday is a time of rebirth, and we can't think of a better automotive resurrection to celebrate than the Zastava Skala 55. Haven't heard of the Skala 55? Sure you have! It was sold here in the United States as the Yugo GV, and summarily tarred and feathered for being a $3,900 brand new car. Let's avoid an epic fight about the past and focus on why we're so jazzed that the rebuilt Zastava factory is still turning out these crisply styled five-doors. At the recent Belgrade Auto Show, Zastava parked a refreshed Skala 55 at its display and had one of the hits of the show.

When the Yugo first arrived on our shores in 1985, it made headlines with its bargain basement $4,000 USD price tag. Of course, four large didn't buy you much of anything, except for a series of breakdowns and the laughter of virtually every motorist that easily passed you by. While the Yugo hasn't been sold in the U.S. since 1991, for the right price you can now bid for the distinct pleasure of owning Zastava, the Serbian company responsible for producing and exporting the biggest punch line in automotive history. The government of Serbia has announced that Zastava, the country's only automaker, is selling off over 90% of its shares this coming April for an undisclosed amount. While the eastern European automaker employs 4,000 workers and can build up to 60,000 vehicles per year, but currently the factory is only producing 15,000 units.

The Yugo was such a disaster when it hit the States, it seemed as though every comedian was required by law to make at least one joke about it. It didn't help that one Yugo owner was killed when the cheap compact became the one and only vehicle ever to be blown off the Mackinaw bridge that connects the upper and lower peninsulas of Michigan. If the price is right, though, we're sure someone will sop up the company, if only for the production capacity and cheap Eastern European labor.

[Source: Detroit News]