Zastava (Yugo) for Sale

This may not seem to be all that significant at first -- but considering the fact that the "new frontier" for autodom is the "ultra-cheap" vehicle, Zastava may be a perfect takeover target for a major automaker.

We all have seen what Renault has done with Dacia in Romania (and to a lesser extent, Samsung in South Korea). We also know that Tata is rushing to get an ultra cheap model to market in India and third world markets. Lastly, we also know that GM and Toyota are looking to play in this field.

We've also recently seen other similar operations show up on the auction block and great interest has arose: AvtoVAZ in Russia and Proton in Malaysia. We know that Proton didn't work out, but Renault got AvtoVAZ. We also know GM is looking to partner with another Russian automaker and take a stake (Graz, I believe).

Could we see a major western automaker make a bid?

I would imagine that the company with the very best chance would be Fiat since they already have a long partnership with them -- but who else may make a bid?

Interesting to see how this will pan out....

Zastava has a long history of relationship with Fiat (the pictured Zastava 10 is a license-built previous-gen Punto recently handed down to the Serbians by Turin), although they are reportedly about to start the assembly of Opel Astra Classics next year, which would make for an interesting short-list of investors interested.

A few other facts worth noting:

1. Volkswagen already has a manufacturing plant in Sarajevo, the capital of neighbouring Bosnia & Herzegovina
2. Renault, apart from Dacia, also has a manufacturing plant in Slovenia, which currently produces the Clio Campus (previous-gen Clio) and the Campus-based new Twingo.
3. IIRC, Ford just won over GM in the battle to acquire the remains of Rodae - the former Oltcic plant in Romania (Romania's "other" automaker), which later became one of Daewoo's orphans

So those three are probably well-positioned in the Balkans enough not to be interested (yet who knows).

Honda would probably be reluctant to purchase an existing plant with all the legacy stuff associated. I guess same holds true for Toyota.

My guess is that they might try to pit Fiat and GM against each other, and one would probably be willing to concede very early on (I'd suppose GM), although Fiat is still not awash with cash.

Another option is that the Ministry already has some plans for Zastava - do remember this is Serbia, a country where "connections" matter a lot, and if anything, Russia's way to "capitalism" might be somewhat indicative. OTOH, a Russian magnate might be interested, given the usual Russian interest in Serbia, perhaps Oleg Deripaska of GAZ/Basic Elements, or the AvtoVAZ guys...