Yugo Economy Cars Fast Running Out of Gas on U.S. Market

Yugoslavia’s financially troubled 6-year-old venture for exporting cheap-priced Yugo cars to the United States is unlikely to last another two years under current conditions, a top Yugoslav government official said today.

“I don’t think it would be good to push this project when there is no demand in the U.S. market,” Kazimir Zivko Pregl, the vice president of Yugoslavia’s Federal Executive Council, said in an interview.

Zastava began exporting its low-priced Yugo subcompact car based on an old Fiat model to the United States in 1985 in a major effort to earn hard currency by undercutting cheaper Asian cars sold here.

Despite an initial flurry of publicity from the novelty of a new car priced around $4,000 and optimistic predictions by its original principals, sales never reached the level projected.

By 1989, annual sales totaled only 10,576, a 66% plunge from 1988 levels.