Belgrade, 21 Sept. (AKI) - Italian carmaker Fiat and Serbian automobile producer Zastava have signed a deal licensing the Serbian company to assemble the popular Punto model in the Serbian town of Kragujevac. Zastava president Zoran Radojevic said the company will invest 15 million euro in the new venture and the assembling will start in nine to twelve months. In the meantime, Fiat would export to Serbia 7000 Punto cars and Serbian engineers would attend training at FIAT headquarters in the northern Italian city of Turin.

He said about 16,000 automobiles were expected to be assembled annually, creating jobs for up to one thousand people. The models assembled in Kragujevac, south of Belgrade, will be named Zastava 10 and are expected to cost about 9000 euro.

Zastava was the sole car manufacturer in former Yugoslavia, and its record production before the country fell apart in 1991, was 120.000 “Yugo” automobiles annually. The factory was practically destroyed in NATO bombing in 1999, and has only partly resumed the production.

At the signing ceremony Fiat's vice-president, Gilberto Ranieri, said the deal was a continuation of long-standing cooperation, which would give Zastava an opportunity to expand its offer in the country and the region.