Tata Motors and Volkswagen considering car production in Kragujevac?

Germany's Volkswagen is growing closer to signing an agreement with the biggest car company on the Indian subcontinent – Tata Motors. The two companies are planning to initiate joint production of a small and inexpensive car, meant primarily for the Indian market.

Tata Motors says that the production of the model in Europe is an option as well and Kragujavec has been mentioned as one of the potential destinations in that context.

This is not a big surprise to those in the know, as Tata and VW used to be interested in acquiring the former Zastava factory.

The Indian government's analysts estimate that Fiat, given the constant drop in production and sales, might leave Kragujevac following the expiration of a ten-year contract with the Republic of Serbia.

In that case, as they claim, Tata Motors might become the factory's new owner and start producing a new model in cooperation with VW. Initiating joint production is an option even if the Italians extend the contract with Serbia, and the new car would then be produced in Fiat's factory in Kragujevac.

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