Remembering the Yugo: Yugot To Be Kidding

(MoneyWatch)  First, the jokes:

A car that doubles in value when you fill the gas tank!

Cutting-edge Serbo-Croatian technology!

A bus schedule included with every car!

A rear-window defroster -- standard -- so your hands will stay warm while pushing it!

Yes, we're talking about the Yugo, a car that's mostly famous for being, in the opinion of many, (or at least to the bad-joke radio duo that is CarTalk,) "The Worst Car of the Millennium."

Now the butt off all these jokes is getting a turn in the spotlight - a 10-minute feature on NPR's Morning Edition, generous columns of ink in the Wall Street Journal - thanks to a new book: "The Yugo: The Rise and Fall of the Worst Car in History."

Author Jason Vuic wrote a by all accounts entertaining business history of car (er, brand) that, when it came out, was a big hit. Fortune named it "one of the outstanding products of 1985." Yugo America was selling one thousand cars a day. At the time it was the fastest selling foreign-car import in history.

Why, and what happened to Yugo America before it went bankrupt in 1991, is a fascinating case-study in how things can go wrong and, surprisingly, right.

The book starts with the former bomb-factory in Yugoslavia where the car was being made. When the American car execs first visit, it's pumping out new cars which already have rust in the trunk and dents in the fenders. The autoworkers drink the local tipple, a plum brandy, from morning till night. And the factory is so dirty that there's a special machine that whips random bits of metal off the floors by beating them with chains.

Vuic considers these execs "heroic" in their ability to turn the factory around in time for the American launch, and canny in their ability spot the market opportunity created by Regan-era "voluntary" quotas that forced the Japanese to abandon the budget car buyer. And for a while it all worked. But six years later Yugo America declared bankruptcy, and Yugoslavia was on the verge of civil war.

The book is by all accounts both a great business book and a fun read. Furthermore, the car itself might even be a great business opportunity. There are only about a thousand Yugos still on the American roads -- and according to Kelly Blue Book you can snap up a nice clean example for about $1000. (Here's one with a $1000 ask on the Green Bay Craigslist.) Shine it up and take to the Classic Car Club of America -- at 25 years old, it's eligible to be in the show -- then sell it when the world catches up to your taste!

photo: Amazon