It’s Not High Tech, but It’s Cheap : Flivver From Yugoslavia Dogged by Bad Reviews
Carol Letus, a supervisor at a savings and loan in Santa Monica, bought one of the very first Yugo GVs sold in California for a very simple reason. “It’s cheap,” she said. And after the first 1,000 miles, she is happy.
“It handles well and it’s cute.” Letus said.
At an advertised price of $3,990, the Yugo GV, a pint-sized import from Yugoslavia that went on sale in California July 15, is the cheapest new car sold in America. It’s also been called “the worst car in America.”
Since its introduction on the East Coast last August, it has been hounded by a stream of terrible reviews. Even after 176 modifications, the car has few admirers in the automobile industry. Its critics say the car is noisy, uncomfortable and sluggish.
William Prior, president of Yugo America, acknowledges that the Yugo doesn’t have “style, fashion or performance in terms of acceleration or cornering.”
“We are trying to sell a concept,” he said. “It performs in people’s pocketbooks.”
The Yugo went on sale a year ago and sold just 3,000 cars in 1985. Prior believes the company will sell between 50,000 and 60,000 cars by the end of this year, and 100,000 annually by 1987--a goal analysts say is optimistic. Prior said Thursday that nearly 20,000 of the cars have been sold so far this year.
Prior expects large sales in California, the nation’s biggest auto market. About 1.1 million new cars are purchased in California each year, accounting for about 10% of all U.S. car sales.
“In terms of the sheer size of the market, California is very important to us,” said Prior, who expects the state to eventually account for one-fifth of the Yugo’s annual sales.
Analysts said that if Yugo hopes to attract more buyers, it will have to overcome the stream of bad publicity and improve the car. The company says it has already made some improvements and intends to make more.
The 176 modifications made since the Yugo was introduced in the United States mostly involve comfort and convenience. For example, the manufacturer improved the window seals to reduce wind noise.
High tech, it isn’t. The Yugo GV--the letters stand for “great value”--is based on a 20-year-old front-wheel-drive Fiat design. One result of using the older technology is that the Yugo isn’t as fuel efficient as other cars its size, nor is it as powerful.
Plush Seats
Before it went on sale in the United States, the car--made in Yugoslavia by Zavodi Crvena Zastava, a company that started making cannons in the 1800s--underwent more than 500 modifications, such as adding a rear window wiper and plush seats, to make it more attractive and comfortable.
However, the Yugo’s main attraction for consumers is not design, but price. Despite the advertised price tag, the car is almost never sold for $3,990, company officials said.
After dealer markup and destination charges are added, the car generally costs $4,644. That’s still at least $1,000 cheaper than other mini-automobiles, Yugo officials point out.
Vicky Thomas, owner of a Yugo dealership in Los Angeles, has sold 20 Yugos over the last three weeks. She decided to sells the Yugo because “a lot of her friends,” who are “single women and raising kids by themselves,” told her they were looking for a car they could afford.
She said it’s noisy and “not on the leading edge of technology.”
“But I’m not sure how good a car should be for $4,400,” she said.
Ronald Glantz, an automobile industry analyst at Montgomery Securities in San Francisco, said the Yugo has “serious problems . . . it rides rough, the controls look old, it has a very vague transmission.” But he said the car could do well once some of its weaknesses are corrected.
‘Very Primitive’
“The car sold in Yugoslavia is very primitive,” said Glantz, referring to its decades-old design. “It’s almost a rough draft. But I think a year from now, they could have a pretty good $4,000 car.”
Other analysts aren’t so optimistic. It was Robert Martin, new car project director at the respected J.D. Power & Associates automotive market research firm, who surveyed Yugo owners and their problems and concluded that the Yugo is “the worst car in America.,”
The magazine Consumer Reports said in February that the Yugo handled well enough and braked effectively, but its “comfort, ride, shifting, heating and design of controls were below par.” The magazine told readers with only $4,400 to spend that they should buy a “good used car” rather than a Yugo.
The Yugo was also among several compact cars that performed poorly on crash tests conducted by the National Highway Safety Administration. In test results released Thursday, the Yugo received scores that suggest front-seat occupants would probably die in a head-on, 35-m.p.h. collision.
Crash Test
More recently, the Insurance Institute for Highway Safety reported the Yugo turned in the worst performance of the 23 small two-door cars subjected to its 5-m.p.h. crash test.
Prior downplayed the importance of the tests. He said Consumer Reports tested only one car “and they wouldn’t let us take a look at it to see what’s wrong.”
He said the four crashes involved in the Insurance Institute test--two rear-end crashes, a front-end crash and a sideways crash--would never occur at the same time. He stressed that the Yugo meets all federal safety standards, which are designed for 30-m.p.h. crashes.
The Yugo is only one of many under-$6,500 cars bound for U.S. showrooms. Such car makers as Volkswagen, Nissan, Honda and Subaru are developing their own version of what the industry calls the econobox--a small, inexpensive automobile.
J.D. Power & Associates said the market is on the verge of an explosion. He expects that 200,000 mini-autos will be sold this year and by 1990, the number will increase to 1 million.
With the arrival of cars such as the Yugo and the Korean-made Hyundai, “the industry has rediscovered the low-priced car market,” said Chris Cedergren, a J.D. Power analyst.
So far the Hyundai, which has received generally good marks for performance and comfort, has far outsold the Yugo. The Hyundai went on sale Feb. 20 and had sold just over 72,000 cars through the end of July.
