May 5,2008  From Auto News

May 5--Italy’s Fiat SpA will sign a memorandum of understanding on Wednesday with the Serb government to invest in car maker Zastava together, Serbia’s Economy Ministry said today. 
     
"Fiat is interested in a strategic partnership with Zastava through a joint investment with the Serbian government," the ministry said in a statement. "This is going to be the biggest investment in the history of Fiat." 
     
It gave no further details of the proposed partnership. A separate statement from Serbia’s President Boris Tadic said he would meet the Fiat delegation in Belgrade tomorrow. 
     
Last week, the chief executive of the Italian industrial group, Sergio Marchionne, said Fiat was interested in Zastava but was "just looking" and had yet to decide on an offer. 
     
Serbia started a pre-tender procedure for selling Zastava, maker of the Yugo car, in December. A tender, due to be called this month, was stalled by the collapse of the government in March. 
     
A government official who insisted on anonymity told Reuters last week that Fiat was interested in investing up to 300 million euros ($475 million) in the plant. 
     
Zastava already has a deal with Fiat for assembling Punto cars, selling them in Serbia and neighbouring Balkan countries under the Zastava 10 brand, and also exporting them to Russia. 
     
It also has a deal with General Motors for the local production of Astras, with the first cars expected to roll out later this year.

Editor: Haijing Qu