Yugo: How it went wrong

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By Patrick R. Foster

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I know what you’re thinking: Foster is really losing it. Why would anyone write about the Yugo GV, a car considered the worst automobile ever sold in the United States? One that he himself described as “an obsolete Fiat design assembled in a backwards country by disgruntled Communists.” Well, the truth is, the Yugo was such an awful car that it has acquired a sort of charm, kind of a “reverse snob appeal,” if you will. That’s not to mention that low survivability rates have made the once-ubiquitous Yugo a real rarity nowadays. And, you know what? They’re also kind of cute, in an “ugly VW Beetle” sort of way. Finally, their story is interesting.

The Yugo was a product of the Yugoslavian automaker Crvena Zastava, which began producing automobiles in 1954 by building variants of the existing Fiat 1400 and Fiat 1900. By 1981, the firm was producing its new Yugo 45 based on the discontinued Fiat 127, though with more modern styling. That car became the Yugo that was brought to our shores.

Bringing the Yugo to America was Malcolm Bricklin’s idea. One of the founders of Subaru of America and a guy who really enjoyed the car business, Bricklin was most famous for his failed Bricklin safety sports car project in the 1970s. The safety sports car was followed by his attempt to market the Fiat X1/9 and Fiat 124 sports cars as, respectively, the Bertone and the Pininfarina, a venture that also ultimately failed.

The right price in an inflated market

In the mid 1980s, Bricklin spotted another opportunity to make money in the auto industry. Inflation in the late 1970s had boosted car prices dramatically, creating the new phrase “sticker shock” to describe the reaction people had when they visited new car showrooms. Buyers in America were extremely upset over the high price of cars and many of them were simply priced out of the new car market. Bricklin realized that if he could bring in a truly low-priced car he could sell a bunch and make a ton of money.

Unfortunately, the car he settled on as the budget-priced solution to America’s car price problem was the Yugo. It was cheap to buy — he reportedly bought them for around $2000 each wholesale — and each delivered good gas mileage. The right to distribute them in America was available at a bargain price, so everything seemed fine at first. Bricklin set up a new company known as Yugo America, Inc. located at 180 Summit Ave., Montvale, N.J., right in the heart of what was then the area where most European importers were headquartered. U.S. sales ofYugos began with the 1986 model year.

Two Yugo models were initially offered. The volume model was the GV, a small but stylish two-door hatchback sedan priced at an amazing $3990. For comparison sake, a similar 1986 Toyota Tercel was tagged at $5798, while a Honda Civic hatchback was $5479. Among domestic cars, a Chevy Chevette was $5959 — almost two grand more than the Yugo — and a Ford Escort Pony was $6052. So, the Yugo represented a real bargain, price-wise, compared to other entry-level cars on the market. And its base sticker included front-wheel drive, power brakes, rack-and-pinion steering, steel-belted radial tires and even a rear window wiper, washer and defroster. Full PVC undercoating and a bodyside molding were also standard. That level of standard equipment was amazing considering the price of the car.

A more deluxe version was the GVX that added as standard equipment sport alloy wheels, wider tires, front air dam and fender flares, a thicker front sway bar and an AM/FM stereo cassette radio with digital clock.

Yugos were powered by a 1.1-liter (68-cubic-inch) overhead-cam inline four-cylinder engine with a two-barrel carburetor generating 55 hp at 6000 rpm and 52 lb.-ft. of torque at 4600 rpm. Power was fed through a four-speed transaxle; an automatic transmission wasn’t offered. Wheelbase was a diminutive 84.6 in. — roughly a foot shorter than an AMC Gremlin. Overall length was 139 in., and width was 60.7 in. A small car, as I said.

Interior room was tight, but decently trimmed, with a pair of well-padded bucket seats up front and a fold-down rear seat. Instrumentation and creature comforts were sparse. However, people didn’t expect much in a small car at the Yugo’s price, so none of this was a problem. That low, low price tag helped people overlook its many shortcomings.

The front-drive chassis included four-wheel independent suspension boasting MacPherson struts with coil springs up front and struts plus a transverse leaf spring out back. Brakes were front disc and rear drum.

When Malcolm Bricklin began to advertise the upcoming debut of his new Yugo, dealers swarmed to his banner — they realized that offering a car for under four grand in 1986 would be like printing money. Those dealers were right with Yugo America selling nearly 36,000 units in calendar 1986. The following year, sales climbed to 48,812 Yugos!

Yugo — but do you really go?

The problem in all this was that the Yugo suffered from a hornet’s nest of quality problems. The factory itself was old and very dirty, the work force was militant and — how to put this — not of the highest caliber. Some Yugo America inspectors observed workers smoking on the assembly line, drinking shots of brandy while on coffee break and stepping in and out of cars on the line with greasy shoes and dirty uniforms. It’s hard to get quality from intoxicated workers, especially when the plant itself is run down and filthy too. The Yugo was built down to a price, so the componentry was usually purchased solely based on the lowest price. Trim pieces fell off with shocking regularity, and breakdowns were not uncommon.

Performance was nothing to brag about, either. Accelerating from 0-60 mph took about 14 seconds and top speed was about 86 mph. For all that, testers reported fuel economy of just 25 mpg, not very good for such a small car and small engine. After Car & Driver’s technical editor road tested one, he rendered this judgment: “It’s obvious to me that the Yugo GV is inferior to every other car sold in America.” The Yugo GV also performed poorly in crash tests.

Comedians had a field day with the Yugo, one asking the question, “How do you double the value of a Yugo? Fill the gas tank!” Another claimed the Yugo came standard with a rear window defroster so your hands would stay warm while you’re pushing it.

No one wants to buy a car that’s the butt of jokes and breaks down a lot, so Yugo sales began to slump in its third year. Only 31,545 Yugos were retailed during calendar 1988. Sales dropped farther to 10,576 units for 1989. Desperate to prop up his business, Bricklin introduced a convertible Yugo for 1990, but sales continued to fall. Just 6,359 Yugos were retailed for 1990.

The company went bust and was left with a fairly large inventory of brand-new Yugos that no one wanted. I well remember one firm offering brand new Yugos for $2995 — in 1990! That was a cheap price for a used car, let alone a brand new car. Such tactics worked to unload the remaining Yugos. A friend of mine bought two of them; one to drive and one to keep as a spare. He actually loved the cars.

Who knows — you might love them, too. They are getting a little hard to find, because so many were junked for lack of parts and service. Completely restored Yugos can be found for $6,000-$8,000 asking prices, and ones needing work can be bought much cheaper than that. You just have to decide which works for you and then try to find the best example you can afford. Good luck!

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