1985-1992 Zastava Yugo: America’s Second Favorite Communist Car

1987 Yugo GVX

As the cost of new cars climb, many buyers have turned to increasingly reliable used cars. From time to time someone steps up and attempts to offer a new car alternative for those needing no frills basic transportation. The concept is not new. Volkswagen, Toyota and Honda gave it a try in the 50s, 60s and 70’s. The 80’s marks an especially interesting period that saw emerging car makers from formerly second tier industrial nations take a stab at the US auto market. The Yugo and Hyundai’s Excel come to mind as two products that shared similar fates as examples of what not to do when entering the market with a low-priced car. Hyundai learned its lesson, but Zastava, the maker of the Yugo would not survive long enough in America to tell about it. Interestingly, the Yugo would be the first Eastern Bloc made car that would sell well in the United States. The most loved communist vehicle the Trabunt was never available for sale in this market, but thanks to the rock band U2, it became the most loved of symbol  of communist mobility. The Yugo would be the most ridiculed.

1990 Yugo Cabriolet

Imported in the aftermath of a deal by Malcom Bricklin, the  guy who introduced Americans to Subauru and sold the Bricklin sports car in the 70’s. The boxy sub-compact was not the ugliest car on the road. All dressed up in GVX trip it was almost an attractive clone of an old VW Rabbit. It was no coincidence than ads featured the Yugo alongside iconic cars like the Beatle and Model A as examples of simple affordable transportation. Early European cars were powered with a tiny 45 hp engine. US versions got bigger old-fashioned carburetted engines of up to 1,100 cc. No one seemed to care about the lack of power because the $4,000 car got anywhere from 42 to 54 mpg (in theory). The Yugo seemed like a genuiune alternative to buying a used Chevette or Escort. That money would buy you a five speed manual transmission and the crude underpinnings of an old Fiat 127, the car the Yugo was based on. There were a few varieties of the Yugo, with the GV (great value) model being the base. The better optioned GVC, GVL (luxury) and GVX (sport) had more lush interiors, but were still very basic. A cabriolet model topped out the range and became the lowest priced convertible you could buy in America. To assure buyers of quality, the Yugo came with a 10 year 100,000 mile warranty and free initial maintenance.

Yugo Interior

The press was initially lukewarm about the Yugo, but praised its initial value. The automotive press was not so forgiving, calling out the GVX for its drivability problems (stemming from the carburetted fuel delivery system). Although far from a pocket rocket, early cars struggled to reach 70 mph. With 55 hp, cars with the larger 1,100 cc engine could reach 110 mph while returning gas mileage in the low 30’s. Most car enthusiast magazines were giving the Yugo mixed ratings. Regardless of what the media was saying, the Yugo sold like hotcakes in the early years. Becoming one of the most sought after new cars in 1987 with sales topping 48,000 units.  Success caught up with it as the old emissions technology was at the source of a massive recall that nearly killed the company. In fact it did.  The old style carburetor could not pass strict emissions tests, prompting the company to scramble for a solution.

By 1990 all versions of the Yugo got larger engines with the 1300 cc powering the GLV and GVX versions. A Renault sourced three speed automatic transmission joined the standard manual and air conditioning for the first time became an option. More importantly, the old carburetted fuel injection system was replaced by a modern electronic system. Even with all the new features, the Yugo’s legacy as a lemon was shaping up. Many cars already on the roads were experiencing quality control problems after just a few years.

The general press was coming down hard on the Yugo as the 90’s approached. Consumer Reports in its review of the Yugo, called the car “hard to recommend at any price” and concluded that “you’d be better off buying a good used car than a new Yugo.” Hyundai had similar initial success with its better built (but still imperfect) Excel and had become the new budget car darling of the media. Sales had started taking a gradual dive from a peak in 1987. A premature nose dive came when UN sanctions against Yugoslavia stopped all exports from the factory. The 1991 shut down resulted in sales just under 4,000 units. Plans were made to introduce a second car, but were scrapped with the rest of Zastava’s plans for the US market.

Malcom Bricklin, now a little lukewarm about Zastava, started talks to revive the automaker in America, but turned his attentions towards the Chinese company Cherry instead. Zastava continued selling the Yugo with few changes until 2008.

The Yugo is now a textbook case in how not to sell an inexpensive car in America. The Hyundai Excel had a similar story, but with a happier ending. To all fairness to these cars, they were poorly made, but many of the first time buyers who had no car ownership experience never bothered to maintain them. Even with Yugo’s free maintenance program, many owners never bothered to bring them in for routine service like oil changes. The low price made many think of the Yugo as a disposable appliance; the kind of car you’d buy a kid going away to college that you knew would be run into the ground by graduation. After all, it cost as much a top quality lawn tractor or high-end audiophile sound system. For those who saw it as liberation from the uncertainty of a used car, it was not much condolence, when your new car could not pass an emissions test or component failure meant frequent trips to the dealer for repairs. For those reasons the Yugo will probably keep its reputation as one of the worst cars sold in America.

1985 Yugo GV