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Behind The Wheel

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Dec.28

1:12 PM ET

Friday, 28 Dec 2007

The Yugo's Next Life (We're Serious)

Posted By:Phil LeBeau

Sectors:Oil and Gas | Technology | Automobiles and Parts

Yugo
For sale: Auto company with a colorful, if unspectacular, track record. Located in the fast growing eastern Europe market with plenty of capacity for building new models.

The prize property on the block? Yugo! Yes, that Yugo!

After years of struggling to make it as a state-run auto company, Zastava is being sold by the Serbian government. The country expects at least a couple of major automakers to bid for Zastava. Why not? It has the capacity to build 60,000 vehicles; and in Eastern Europe, that capacity could be worth snapping up, as automakers rapidly expand in that part of the world.

So what will happen to the Yugo?

Well, given that the car Americans derided in the '80s never escaped its shoddy reputation, I'm not sure anyone would want to bring that car back -- at least not here in the States. But the idea behind the Yugo lives on.

All of the automakers are trying to build a low-cost car that will help them win over the developing middle markets in Eastern Europe, India and other developing markets.

Renault [RNSDF Loading... () ], with it's red-hot Logan, appears to be the one auto company that has figured out how to do this. But others, like Tata [TTM Loading... () ] out of India, are hoping to duplicate that success.

So while the Yugo is unlikely to come back, the sale of its parent company is a reminder of the vision of importer Malcolm Bricklin: A low-priced car that can win over the masses.

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