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Zastava is a Serbian manufacturer based in the city of Kragujevac, 86 miles (138 km) southeast of Belgrade. The company began collaborating with Fiat in 1955 to assemble versions of its cars for Eastern European markets. The firm also manufactures military and sporting small arms, most of them based on Russian or German design; like the LKP-66 sporting rifle (based on the semiautomatic Russian SKS) the LKP-96 (based on the AK-47) and the LP M70 and M85 series (based on the German Mauser 98 bolt action.) The Zastava bolt-action rifles are sold in the USA by the firm of Charles Daly.

The company is best known for its locally built versions of the Fiat 128.

During the 1970s and '80s, Zastava sold its compact cars in North and South America and Western Europe under the "Yugo" brand. Its final model, the Yugo Sana, was styled by Italian designer Giorgio Giugiaro and launched in 1990, but its career was cut short by the Yugoslav wars, and Yugo had disappeared from most Western markets by 1993. In 1999, the factory came under NATO bombing during the Kosovo War missions.

Like fellow Eastern bloc manufacturer AutoVAZ, maker of the Lada, the post-communist era has been difficult for the company, and following its withdrawal from Western markets, has developed few new models such as Yugo Florida and continues to manufacture the Fiat 128 based range of cars for the various Balkan states.

In September 2005 company signed new agreement with Fiat - under name Zastava 10 factory will produce Fiat Punto for the Balkans. It is scheduled to make up to 16,000 cars yearly. In October 2005 Zastava concluded an agreement with the US weapons manufacturer Remington Arms to offer its sporting arms in North America.

Resource: http://en.wikipedia.org/wiki/Zastava