The ancestor of the factory was a cannon-casting plant, founded in 1853.
The first vehicles in Kragujevac were Ford trucks. They were made exclusively for the Yugoslavian Army in the late 30's, since today's "Zastava" was a gun factory named Vojno-Tehnicki Zavod (Army Technical Institute). A small number of vehicles was made until the outbreak the war in 1941. Then in the early 50's some number of Jeeps was made, but the deal with Willys-Overland (Chrysler) went off, and the production stopped.

After the 2nd world war the factory got a new name: Zavodi Crvena Zastava (means: "Red Flag Plant"). (Later the "Crvena" has left from the name.) It first started building passenger cars in 1954. The first Zastava cars were varients of the Fiat 1400, 1300 and 1900. In the same period, Zastava introduced another car. It was 1300 cm3 four door sedan, known in Italy as "Milletrecciento", it was a modern car at that time. (FIAT introduced it in 1961.) Many people in Yugoslavia think it was the best car ever made by Zastava, despite to the fact it is forty years old model.

Next came the Zastava 750. It was same as the FIAT 600D, (4cyl, 767 cm3 , 25 HP OHC engine, rear wheel drive). Its mass production started in the early sixties, it was in production until 1981. Throughout the 60's Zastava built more Fiat based cars that evolved from the 1100, 1300, 1500, 124, and 125 Fiat models. But FIAT 124 and 125 were never built in Yugoslavia. FIAT 125 was imported from Italy and later from Poland. FIAT 124 was very rare in Yugoslavia. Some other FIATs were also on Yugoslav market, but I am not sure if they were imported, assembled or built by Zastava. It was the original 600 cm3 version of 600D and FIAT Multipla based model 600.

In the beginning of the seventies Zastava made another arrangement with FIAT. In 1971 Zastava introduced the Zastava 101 (4cyl, 1116 cm3 OHC, 55HP, front wheel drive), which is based on FIAT 128. It had a restyled rear panel, and later became available as a hatch back, a style that had not been issued in Italy. It was said that model 101 should be produced in Yugoslavia for both Yugoslav and Italian market, and vice versa, in the Italian market is marked as Innocienti. This car was much worse than it's predecessors. It was not made under FIAT's license, but by some other sort of agreement. Without strict quality control, a car turned out to be disaster. In Yugoslavia, people used to say: "You need at least three years to fix everything that morons in the factory had screwed, and after that it is about the time to sell the car." Despite of it's poor quality it was widely spread in Yugoslavia. This market was always hungry for the new cars. People used to buy it because of it's moderate price, cheap spare parts and low maintenance cost.

In the middle of the seventies, Zastava management decided to develop a new model, based on FIAT engine. It was supposed to be called Zastava 102, but later on in 1981 it was presented as Yugo 45. It was styled by Zastava with help by the FIAT engineers, and it was related to the Fiat 127, but different in appearance. Examples were made with the 903cc, 1100cc, and 1300cc engines. The 1100cc and the 1300cc versions were sold in the USA as the Yugo GV, GVL, GVS, GVX, GV Plus, and the Cabrio.
  About the American export
Later in the eighties, there were a lot of versions and modifications. The most important are five speed gearbox and FIAT 128 1100 cm3 and 1300 cm3 engine.

The factory started to make trucks, which were based on IVECO licence. The names of the passenger cars are changed from Zastava to Yugo. The Yugo 45 named as Yugo Koral (in the European markets), the Zastava GTL (the Fiat 128 clone) named to Yugo Skala.

In 1988 the new Yugo model was shown, called Florida (Sana in some countries).
It's exterior designed by Giorgetto Giugiaro, its shape is similar to Fiat Tipo or Citroen ZX.

In the best years the factory assembled 230000 cars a year, the cars were sold in 70 countries, 27000 were exported to the western countries.
  Pictures of the factory
In the early 90's, when Yugoslavia was in war the export fallen. The production of the factory were unstable, because NATO bombed the Zastava plant. But these events weren't interrupted the factory, it was working in three shifts even during the NATO bombing. (Zastava is working continuously since the factory was built.) The managers removed all from the factory in last moment, before the bombings started, but unfortunately the buildings of the factory has damaged.
  Bombing of the factory
The export were impossible these years, because of the trade sanctions against Yugoslavia. Between 1992 and 1995 it was under UN sanctions, and then between 1998 and 2000 it was under EU and US sanctions. The export was possible only trough Montenegro to Slovenia, which was not member of these organizations.
  Yugos again

After the war, there were trade talks to Hungarian firms, to assemble Yugos in Hungary, but this agreement haven't been concluded because of hesitating of the Yugoslavian partner. (But Zastava trucks are assembling in Hungary, near to Pécs, with IVECO engine.)

Yugos had been face-lifted, the new versions are introduced in the Belgrade motor show. New Yugo has 1,3l 80HP motor with BOSCH injection, the transmission designed by Porsche, slightly new internal and external design, improved safety, and lots of details.
The new generation of Yugo has FIA certificat, so it's complaint with European standards. It is most likely, that Yugo will return to European and even American market.
When in 2000 October Vojislav Kostunica (who also a Yugo owner) become the new president of Yugoslavia, the sanctions against Yugoslavia are lifted, so the export will be possible.
Now the plant has been rebuilt, only the computer center left in damage. The production of Zastava start to increase slowly. In 2000 factory produced 15000 car, from this 4000 were exported.
With the Fiat the prototype of Yugo Florida 2.0 made, with the engine of Fiat Bravo 2.0.
In 2001 the face lifted IN models launched.
  The current Koral IN model
  The current Florida IN model
By the end of 2002 the Zastava plans to launch three new models. If everything go well, first prototype of Yugo based model Koral comes by the end of this year.
In April 2002 on the Belgrad Motor Show some new model presented based on the Florida: Caravan and Sedan.
  The Florida Caravan
  The Florida Sedan
The Koral got new design, new front and rear lamps and dashboard.
  The new Koral model introduced in 2002 Belgrade Motor Show
New engines replaced the DMB engines. The new models have Peugeot and Toyota VVT-i engines.
  The new Florida engines introduced in 2002 Belgrade Motor Show

The Zastava will export again to the USA, as name ZMW (Zastava Motor Works).
After some unsuccesful trade talks with Fiat and Peugeot, the privatisation of Zastava seems to be finish. The American importer of Zastava (ZMW) will buy the factory.