TATA Motors and Italian ally Fiat Motors are among the five global companies vying for Zastava Auto, the Serbian national automobile manufacturer up for sale this December. Others in the list include General Motors, Ford and an unidentified Chinese company.
Zastava Auto—the struggling Serbian government-owned car maker—currently cranks out the Yugo model of cars, besides the Opel Astra and Punto under deals with GM and Fiat respectively. Its group company Zastava Kamioni manufactures small and medium-range trucks.
Tata Motors is the largest Indian automobile company with revenues of over Rs 32,000 crore (2006-07 fiscal). When contacted, a Tata Motors spokesperson refused to comment on the talks or any formal bid for Zastava Auto. “As a policy, Tata Motors does not comment on such matters,” he said.
However, automobile industry sources say Tata Motors is interested in Zastava Auto because it wants to use the Serbian company to expand its base in eastern Europe. The Indian auto major has been looking to tap emerging markets across the world.
“Tata Motors has full-fledged facilities for both commercial vehicles and passenger cars at the international level. It is hunting for new emerging markets and is looking for small and medium level companies to gain a footprint on a global level. Zastava Auto is ideally located for its ambitions in East Europe. Tata Motors is evaluating the company as a potential manufacturing base in the eastern bloc,” said a source. It already has agreements with companies to manufacture and market its products in south America, south and south east Asia, Russia, Africa and the Middle East.