Volkswagen is considering taking over Serbian vehicle maker Zastava.

According to Germany's Handelsblatt newspaper, the Serbian state, which owns 99.9% of the company, wants to privatise it. Last year 25,000 vehicles were produced  compared with 200,000 in the 1980s. 4,000 people are employed there.

A VW spokesman told the paper that any investment would be like a new investment. Production equipment at the plant is out of date. "We have looked at the plant but we are a long way off making a decision," he said.

Other companies reportedly are also interested in the company. The Fiat Punto is built under licence there, and Fiat has had business dealings with the company dating back to the 1950s.

Ford, Tata and FAW are also reportedly interested. The deadline for the submission of bids is 15 April.
GM has, however, ruled itself out of the bidding, according to the report.