The FSO plant was established in 1951 by the Polish state in the northern part (Zeran) of Warsaw to produce automobiles for postwar Poland. The first product of FSO was Warszawa (big limousine and kombi) manufactured under the Soviet GAZ-M20 Pobeda license.
Later, the small Syrena model was introduced. In the early 1970s an agreement was concluded with the Italian Fiat company to build a new middle-class model, called Polski Fiat 125. This model was produced until 1991. The state-owned company developed a new middle-class model named FSO Polonez, equipped with a liftback body.
After 1989 the problems of insufficient technology emerged and in mid-1990s the company was bought by Daewoo Motors (that collapsed in 2001). As of 2005, the negotiations with a variety of foreign and Polish companies are held to keep the factory going as it needs further implements of technology and new models of vehicles. UkrAVTO holding is currently seeking to buy 20.36% of shares from the government; it also plans to relocate the equipment from the transmissions plant to the ZAZ.
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