Why you should care
Because thrift is a virtue … until it becomes a punch line.
It’s been 30 years now, but many Americans still remember the jokes. What comes with every Yugo user’s manual? The bus schedule. And the insults: Yo mama drives a Yugo!
But few actually encountered the Yugo, the $3,990 icon of affordable transport, the Communist automotive wonder launched into the heart of Reagan’s America. And few recall when “Yugo-mania” swept the nation long before the chorus of punch lines accompanied the wee car’s epic fall. “Remember this date,” Mark Knepper of Motor Trend wrote of August 16, 1985. “That was the day scores of otherwise rational consumers went into a feeding frenzy at dealerships in the Northeast, attacking at first light, waving … fistfuls of money, and first-born children in a fury that cowed even veteran salesmen.”
Yugo promised a “road back to sanity” for American car purchasers.
A soup-can-style predecessor to the smart car, the Yugo GV, manufactured in Kragujevac, Yugoslavia, had no radio, no AC, no air bags, no glove compartment … no frills. What it had was serious buzz. Using ads incorporating the iconic Volkswagen Beetle and Henry Ford’s Model T, Yugo pitched its subcompact car as the “latest wave in low-priced reliable transportation” and promised a “road back to sanity” for American car purchasers. But when your modest vehicle is being co-piloted by the forces of consumer capitalism and Communist production, sanity is probably the last place you are headed.
First, let’s put this small car into a bigger picture. Shopping for a car — if you can call it that — in the Eastern Bloc in the early 1980s was not designed with the customer in mind. As Jason Vuic chronicles in The Yugo: The Rise and Fall of the Worst Car in History, you couldn’t choose your color or interior, you received no warranty, and typically you had to pay up front and then wait six months for your mystery car to be delivered. But, after the oil crises of 1973 and 1979, buying a car in America was no cakewalk, either, and many buyers opted for the high-gas-mileage “econo-boxes” being imported from Japan. By 1984, that was changing, and as more upscale sedans like the Honda Accord took over the market, the low-priced compact car was quickly becoming a relic.
The year 1984 was also a big one for Yugoslavia. The Communist nation, which had distanced itself from Soviet Russia in 1948, not only hosted that year’s Winter Olympics but also turned up at the summer games in Los Angeles when many Communist countries followed the Soviet Union’s lead and boycotted them. At the same time, U.S. officials like former Secretary of State Henry Kissinger, looking to boost relations with Yugoslavia and counterbalance a trade deal with U.S.-based Occidental Petroleum, needed to find something made in Yugoslavia to import to America.
What they found was Malcolm Bricklin, a brash serial entrepreneur who had sold Italian jukeboxes and brought Japan’s Subaru 360 — deemed “unacceptably hazardous” by Consumer Reports — to America’s shores in the 1960s. “I sent my people to find the cheapest car in the world,” Bricklin later told Car and Driver about the Yugo’s origins. “They found Zastava, in Yugoslavia, a 50-year-old factory building a 30-year-old car. We took this piece-of-crap car and within 14 months had set up 400 U.S. dealers and made 528 changes to the car.”
Targeted at first-time and value buyers, the revamped Yugo became the fastest-selling European import ever. Bricklin was hauling in more than $2 million per month. Chrysler considered acquiring the company. On the verge of bankruptcy when it first hit the market, Yugo was buoyed by close to $20 million in free publicity from an obsessed media.
Most critics, however, were not impressed. The Yugo’s humble look was variously panned as “boxy,” “feeble,” “ugly” and “bland.” “I can’t think of anything that is more the antithesis of sex appeal than a Yugo,” wrote one reviewer. And the car performed even worse than it looked. Was it really that bad? “Yes … by almost any measure,” says Vuic. “It was cheap, poorly built, somewhat unsafe in a crash, prone to breakdowns, and dirty emissions-wise.” After Consumer Reports advised readers to opt for a good used car rather than take their chances with a brand-new Yugo, it didn’t take long for the jokes to follow. “Yugo has come out with a very clever anti-theft device,” Jay Leno quipped. “They made their name bigger.”
But it took more than poor reviews and late-night comedians to bring down the Yugo. The endeavor was badly undercapitalized, and even when things took off, Bricklin had trouble getting the Communist-run factories — with no local competition — to address quality issues or build newer models. Bricklin would attribute the difficulties to his Yugoslavian partners reverting to, as he told Car and Driver, a “communist mentality” that said “when you have more demand than supply, you can sell whatever the hell you feel like building.”
By the 1990s, war had erupted in the Balkans, Slobodan Milošević had ascended to power and NATO missiles would ultimately hit the Zastava car factory, which also manufactured military equipment. Yugos disappeared from the streets of America, though they continued to be made in Serbia until 2008. The notorious import would be voted “Worst Car of the Millennium” by listeners of NPR’s Car Talk.
But so it goes in the automotive world. Yugo … until you don’t.