Changes Made in Yugo to Meet U.S. Tastes : Yugoslavia Has High Hopes for Car
There are no robots at the auto plant near here. It is a throwback to the 1960s, and most of the work on the little Yugo cars headed for the lower end of the American market is done by hand.
Managers at the sprawling plant make no apologies for the relatively primitive nature of the operation.
“Our analysis of the U.S. market shows us that there is a big segment that needs exactly the car we can make,” Saric Dobrica, the plant’s chief planning coordinator, told a visitor. “Our car completely satisfies the requirements for the class to which it belongs.”
The plant is situated at a place called Crvena Zastava, which in Serbo-Croatian means “Red Flag,” and lies at the end of a winding, two-lane road on which traffic is often slowed by horse-drawn carts.
The decision to build the Yugo here was based on economic factors: There was already an assembly line, built to turn out the Italian Fiat, and cheap labor was available. They combine to keep the price of a Yugo at about what a two-week European vacation for two would cost.
The average auto worker, under banners calling for greater productivity and amid shrines to the late Marshal Tito, founder of the modern state of Yugoslavia, takes home about 80,000 dinars a month. This is the equivalent of about $1.60 an hour; the average auto worker in Detroit is paid $13.70 an hour, not including company benefits.
“This may not seem like much in America, but here it assures our people a good life,” Dobrica said.
The Yugo has received mixed reviews in the United States. “Automotive product of the year,” Fortune magazine said. “Hard to recommend at any price,” Consumer Reports said. But undaunted by the negative reviews, and by the greater sales of its nearest competitor, the Hyundai from South Korea, Crvena Zastava plans to bring out two modified models later this spring, and to follow up next year with a convertible that may be priced at about $7,500.
The basic price of the stripped-down Yugo GV with a 1.3-liter engine will still be $3,990, but even that amount of money will no longer buy what it used to buy. The 1987 GV will be sold without a wiper-washer on the rear window and without headrests on the rear seat.
In any case, only 10% of the Yugos will be offered at that price. Most of the rest will be designated GVL and those will be listed at $4,290. They will have a new form of upholstery, modernized taillights and spring-powered seats that pop forward to eliminate one of the Yugo’s most irritating drawbacks--the need to push the front seat forward and out of the way in order to get in and out of the back seats.
A $4,990 GVX will have a more powerful 1.3-liter engine, fog lights, plastic exterior trim and a five-speed transmission. None will have a glove compartment.
“That’s the way it was designed,” said Mark Bricklin, vice president of Yugo of America, a Saddle River, N.J., firm that has imported about 54,000 of the cars since August, 1985.
Yugo of America persuaded the Yugoslavs to make about 400 changes in order to make the vehicle more acceptable to the American market, but “the one thing we were not able to overcome was the lack of a glove compartment,” Bricklin said.
However, he said in a telephone interview, Crvena Zastava’s designers are talking about a totally new dashboard and console for late 1988, eliminating the need for keeping the owner’s manual in a pouch behind the front seat.
By then, according to Dragutin Manojlovic, director of strategy and marketing, the Yugo convertible should have made its appearance in the United States.
“This sport version of the basic Yugo will probably be more expensive, but still a good price for the U.S. market compared to other convertibles,” Manojlovic said.
He bristled when a visitor who had driven out from Kragujevac in a rented Yugo asked about the angle of the steering wheel, which seemed to be set like the steering wheel of a bus. This quirk has also been commented on by U.S. auto magazines.
“The same car has been sold on the domestic market and many other markets overseas,” Manojlovic said. “There were no requests to change or modify the position of the steering wheel.”
The convertible, which is being designed by a Detroit firm, is said to be equipped with a power top and fog-free rear windows.
Although Crvena Zastava has been here for more than a century--it was founded as an armory, to provide weapons for the Kingdom of Serbia in its battles with the Ottoman Empire--it has been making cars only since 1954.
Like most segments of the Yugoslav economy, Crvena Zastava is nominally owned by its workers, who are consulted on major policy moves by management.
“If the worker is given the reasons for buying new equipment to improve his standard of life in the long run, he will choose the better solution,” Manojlovic said. “He’ll prefer to assure for the future rather than eat all he’s earned now. The interests of the directors and the workers are common interests.”
Nonetheless, he acknowledged that there have been occasional work stoppages as the result of wage demands.
The 16,000 workers put in an eight-hour day and work five days a week. There are two shifts and they turn out 400 Yugos and 400 other Zastava cars a day. The workers get a 15-minute rest stop every two hours and a half-hour lunch break for a free hot meal in the company cafeteria.
“Our line doesn’t move all that fast,” a company official said, looking on as workers in blue cotton smocks attached bumper bolts by hand. “We keep it slow enough so they can get the job done. We call it a socialist rhythm of production.”
Although the Yugo has had trouble meeting California emission standards, Manojlovic said changes have been made so that the basic Yugo can now be sold throughout the United States.
At first, U.S. sales were not as high as they were expected to be, totaling 35,959 units for the first full year, compared to Hyundai’s 168,882. But Bricklin said the Yugo is still cheaper than its Korean rival, and that Yugo of America expects to cling to its position in the market.
“We’re shooting for the first-time buyer who’d otherwise have to buy a used car with no new-car warranty,” he said.
“And there are quite a few buyers who want (the Yugo) for a third car.”
