Yugo Looks for a Comeback

03/12/96

Reuters reported that the makers of the inexpensive Yugo are hoping to stage their own comeback. The Yugo splashed in the American market as a low cost alternative to Japanese cars. In their big year in 1990, Zastava, maker of the Yugo, produced 200,000 of the vehicles, while last year they only made 8,000. The slump in the production of Yugos can be blamed on a civil war that has torn Yugoslavia apart, and UN imposed trade sanctions, but now, The automaker thinks the time is right for a rebound.

Zastava is reportedly engaged in talks with several partners, including Fiat, Renault, Toyota, and Mitsubishi. The company hopes to locate investors for an infusion of cash, so they can keep producing. Becoming profitable would mean that the Yugoslavian carmaker would fire 8,000 of the 15,000 workers that currently work for it sporadically, when supplies are available. The company is willing to sell a majority share of itself in order to keep production going, in spite of a law that forbids foreigners from taking over more than 49% of a domestic company.

Paul Dever -- The Auto Channel