In the mid-1980s, a cowboy capitalist teamed with socialist Yugoslavia to regift a decades-old Fiat onto the American market as the Yugo, a car that redefined the word cheap. Such is the true story of The Yugo by Jason Vuic.
Each chapter’s subheading is a Yugo joke: How do you make a Yugo go faster? Use a tow truck. How do you double the value of your Yugo? Fill the tank with gas. What’s included with every Yugo owner’s manual? A bus schedule.
Jokes aside, Vuic rightly asks: How does something like the Yugo become an icon of bad? And what were the Yugo’s creators, investors, and buyers thinking?
Enter Malcolm Bricklin, an entrepreneur long on salesmanship but short on discipline. He had a knack for raising and then quickly spending lots of money. Prior to the Yugo, he had already notched multiple failures in the car business, each time emerging from the crater to do it again.
Bricklin’s vision for the Yugo was radical affordability. Introduced in 1985, the Yugo cost $3,990, far cheaper than any other new car, and cheaper than the average used car. This price breakthrough generated a media sensation, which made the Yugo famous.
The price was possible because of state-subsidized Yugoslavian labor. However, with a socialist workforce came low productivity and quality.
When most Americans went [to the factory in Yugoslavia],” [Yugo executive] Pete Mulhern recalled, “they expected to see something like a printing press rushing by. And the Americans would say, ‘Hey, why is it stopped?’ But it wasn’t stopped. It was just moving really slowly.”
The Yugo quickly gained a reputation as cheap in the bad sense. Nevertheless, thousands of bargain hunters bagged a Yugo in its first year of availability. That included Yugos given to buyers of certain Cadillac models during a Pittsburgh dealer’s “buy one, get one free” promotion.
But after the bargain-hunting vanguard, customers became harder to find. Ultimately, the Yugo could not compete with its reputation as a joke.
Like Bricklin’s previous ventures, Yugo of America spent far more than it made. Ironically, investors pushed out Bricklin before the company went bankrupt, which allowed him to sell his stake when it was still worth something. The investors that pushed him out later lost everything.
The Yugo’s story includes cameos by Kissinger Associates, Armand Hammer, a Savings & Loan that would be subsequently seized by federal regulators, the government of New Brunswick, Canada, and various other unlikely players. It should also be said that Vuic gives an honorable voice to the unsung managers and executives who toiled to make the Yugo real. For those people, it made sense at the time.
Which brings us back to the question of what were they thinking. Vuic argues that while the Yugo was far from a good car, it was not out-of-bounds bad for the price. He cites surveys of mostly satisfied owners who didn’t expect much for what they paid. He makes a convincing case that objectively worse cars had been sold in the United States—for example, one of Brickin’s earlier imports “burned a quart of outboard motor oil every 260 miles, and had front and rear bumpers that were several inches lower than any car on the road.”
Rather than blame the Yugo alone for its infamy, Vuic also indicts the American 1980s consumer culture. Unlike the 1960s, which had a counterculture that embraced the cheap and simple VW Beetle, the 1980s were about aspiring to the next level up. Whereas the 1960s wanted the Beetle, the 1980s wanted the BMW 3 Series.
So perhaps it was bad timing that pushed the Yugo from being just another mediocre car into the reputational abyss it now occupies. Which reminds me of a joke: How do you make a Yugo go from 0 to 60 in less than 15 seconds? Push it off a cliff.