Zeta Automobiles was founded from two companies, S.E.T.A. and Zastava.
S.E.T.A. (in French: Societe Europeenne de Transports Aeriennes; in Italian: Societa Europea per Transportes Aereos) was a Franco-Europan company that produced small and medium aircraft and engines. They had an engine manufacturing facility in Marseille and a body factory in Milan. SETA was founded in 1957 and had produced 28 airplanes in their first year. But many delays, and increased competition, saw their contracts fall through and their business fail. By mid 1958 SETA had given up the private aircraft business. The plane bodies were scrapped but they were left with 38 aero engines. In late 1958 company executives decided to enter the automotive business, producing the aero-engined powered S.E.T.A. 505. This car faced many problems, notably with its transmission and engine (not meant for a car) and sold poorly. In mid-1959 the engine was replaced with a Fiat-sourced motor which greatly improved the car. In 1960 an updated version was introduced, sold as the S.E.T.A. 525. By then SETA was nearly bankrupt and was taken over by Zastava.
The roots of Zastava lay in the 1851 founding in Kragujevac of the Vojno-Tehnicki Zavod (Army Technical Institute). The institute developed a cannon foundry division in 1853, becoming a military vocational school in March 1854. At the end of the 19th century the cannon foundry changed its name to the Military Engineering Works. The firm rapidly expanded its production program and the complexity and quality of its products. During the early 1950s Zastava entered the highly competitive Europan auto market. They began to sell successfully, though still behind Fiat (KEU) in sales. Zastava began to focus on building rugged cars, that though not refined were very good and reliable. In 1960 they took over SETA and incorporated it, using its factries to expand production capacity. The company was renamed S.E.T.A.-Zastava. that year, but in 1961 it was renamed Zeta (a combination of Zastava and SETA ).
Zeta was able to expand production in the 1960s, with facilities in Milan, Marseille and near Zagreb. By the 1970s Zeta formed part of the "big three" Europan automakers, despite being the only independent one. In 2010 Zeta fell behind Fiat and Alfa Romeo in sales.