By late 1985 Bricklin simply didn't have enough Yugos to satisfy the demand and he wanted Zastava to increase production. This was much easier said than done however. Certainly quality improvements had been made and a dedicated production line had been set up to produce cars solely for the American market but the manpower system at their plant was still primitive with too many humans doing work that would have been done by machines in more modern factories.
In addition many of their components were sourced from elsewhere in Yugoslavia and these were often of awful quality with unreliable deliveries. To cap it all the communist system positively discouraged decision-making. Every change had to be authorised by people higher up in the pecking order, so decision-making proceeds at a snails pace.
Prior to Bricklin's arrival most of the cars that Zastava produced were sold to a captive market in which the buyer had no choice over the car's specifications including colour and interior finish. Luxuries – what we would normally look upon as essentials – such as air conditioning, entertainment systems, automatic gearboxes et cetera were looked upon as nonessentials and so were not available. Warranties were non-existent and the car had to be paid for when it was ordered with delivery perhaps six months in the future if the buyer was lucky. This was not a system which could easily adapt to a sudden increase in demand.
To add to Yugo American's concerns the political situation in Yugoslavia was deteriorating with Croatia starting to demand more autonomy, and demonstrations by Croatians in America against what they termed Yugoslavian imperialism began. Some of these demonstrations were directed against the Yugo with a concerted effort both on the streets and through the media to dissuade people from buying the car, which was after all built in Serbia, a part of Yugoslavia that many Croats considered to be an enemy state.
In the meanwhile the economy in Yugoslavia was in a very precarious condition; the country's debts were spiralling out of control and so the possibility of investing more money in a car manufacturing plant that was already heavily subsidised was out of the question.
On the back of (unlikely) projected future sales Bricklin managed to get another huge line of credit of US$75 million but criticism of the car was starting to become heavy. By this time the quality shortcomings had become obvious and reviewers in car magazines almost inevitably gave it a very firm thumbs down.
The American carbuying public was used to carrying out research on possible purchases before committing to buying one, and that research was showing that the Yugo was nowhere near as good a car as they had been led to believe by all the early hype. By the beginning of 1986 Yugo mania had well and truly fizzled out.
One of the most wounding reviews was in a magazine called Consumer Reports which was generally considered to be the most reliable and unbiased source of information about all types of products in America. In January 1986 they did a report on the Yugo and it was positively damning.
Firstly they queried the price. Officially the Yugo could be bought for just a shade under US$4000 but delivery charges and dealership costs added hundreds of dollars to this. They followed this up with a list of 21 defects, all of which they put down to either defective manufacture or sloppy preparation by dealers. These ranged from the driver coughing because of smoke, caused by oil leaking onto a hot exhaust pipe, to loose bolts holding the transmission together.
Perhaps most damning of all was the way in which they pointed out that as a small car any occupants would be in far more danger of injury if they were involved in an accident than they would be if they were in a larger car. Arguably this was a little unfair because this was a general issue with all small cars and not just the Yugo but the rest of the criticisms were perfectly valid.
They followed up the destruction of the car's reputation by discussing Bricklin's background as well. They pointed out his importation of the dangerous Subaru 360, and his many business failures; and suggested that the Yugo could become one more of these, and that buyers could find themselves stuck with cars with worthless warranties and no source of spare parts.
In their concluding sentences they stated that anyone thinking of spending around US$4400 (the true cost of a Yugo, after all the extras have been charged) should buy a good used car instead.
The popular press got hold of this statement and repeated it over and over again. As a result the car went from one that thousands of buyers were willing to queue for hours to buy to a national laughing stock; and it was not long before the first Yugo jokes arrived.
Sales plummeted. The screw was turned further when an inspector from the National Highway Transportation Safety Administration (NHTSA) found a potentially dangerous seatbelt anchorage point in a car and every Yugo sold in the United States up to that date had to be recalled for repairs to be carried out.
As if this was not bad enough, the same agency carried out 35 mph crash tests on the Yugo; it fared poorly but then so did others. The Yugo results, however, were released to the press early; it would not be unreasonable to assume that someone at the NHTSA was not very impressed by the car.
Criticisms of the car's safety was not completely unjustified. The engine was underpowered and had poor acceleration so getting onto major roads from slip roads could be a hazardous procedure. It had none of the (now essential) features such as anti-lock brakes, airbags, crumple zones. Build quality was poor and seatbelt design was barely adequate. In short the car belonged in the 1970s and not the 1980s so whilst it was not exactly a deathtrap it was just not designed to be as safe as the majority of other cars on American roads at the time.
Even fuel prices affected the sales potential of the Yugo. In 1986 the cost of petrol in America fell below $.90 per gallon which encourage more Americans to buy bigger cars. Even despite falling sales however Bricklin continued to receive a huge salary and bought himself a 4500 acre ranch in Colorado. Sales did pick up slightly, partly as a result of increased advertising and partly because the car passed Californian emissions standards and so could go on sale in the world's biggest market.
Further bad publicity came along when the Insurance Institute for Highway Safety rated the Yugo as the worst car to suffer damage in a low-speed crash when tested against 22 other cars and the conclusion was that even a 5 mph collision could be enough to make one a total write-off. A number of insurance companies promptly increased premiums for their unhappy Yugo owning customers! The rot in the car's reputation was setting in firmly.
Bricklin desparately needed a new car to sell.
Copyright © Ian Palmer 2021 All Rights reservedMeet The Yugo | Enter Michael Bricklin | The Bricklin SV1 Fiasco | Bricklin Faces Bankrupcy Again | The First Yugo In America | How Bricklin Promised Zastava The Moon | Lipstick Is Put On The Yugo Pig | America Decides The Yugo Is Awful | The Proton Saga | The End Of The Yugo