By on May 2, 2008

435_yugo.jpgAccording to Automobilwoche, FIAT signed an agreement to purchase 70 percent of Yugoslavia's Zastava in Belgrade Wednesday. This is a marriage made in Heaven — if you're a comedian. Picture Jay Leno combining Yugo jokes with "Fix It Again, Tony" witticisms. Or Stephen Colbert commenting on a car the grandchildren of Mussolini would build in joyful cooperation with the children of Milosevic. FIAT is investing 700 million Euros in a new modernized plant which will build 200,000 subcompact cars in (you guessed it) 2010 with a new mid-class car to follow. And the punchline of the biggest joke? The Yugo car Americans loved to hate was derived from a FIAT: the 127 model.

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18 Comments on “FIAT Buys Majority Interest in Yugo...”


  • avatar
    ash78

    Fix it again, Tomislav

  • avatar
    quasimondo

    Honestly, I’m surprised that Yugo still exists.

  • avatar
    Vega

    @quasimondo:

    Yeah, especially considering the US is the only car market in the world.

    Oh, wait…

  • avatar
    KatiePuckrik

    This is actually a very smart move on FIAT’s part. Eastern Europe is a growing market and FIAT does have a high repuation there (FIAT recently launched a 5 year bumper to bumper warranty. FIAT are serious about laying those “Fix It Again, Tony” jokes to rest).

    Couple that with its partnership with Tata and THEIR knowledge of building small, cheap cars, I believe that this is an alliance worth keeping an eye on. Between the 3 of them, they have a good presence in the luxury market (Land Rover and Jaguar), a very good presence in the mass produced market (FIAT), an excellent presence in the heavy duty market (IVECO and Tata trucks) and now they have a presence in the cheap, small car market (Tata nano, Yugo and (partially) FIAT).

    And given the close ties between Ratan Tata and Sergio Marchionne, I wouldn’t be in the least bit surprised if a merger wasn’t on the cards…

  • avatar
    garllo

    I can’t wait! Can we reserve on now? I also like root canals and enemas… All kidding aside,I think that it is one of FIAT’s smarter moves.

  • avatar
    jthorner

    Fiat continues to make smart moves. The growing, profitable automotive markets of today and the future are not in Japan, not in North America and not in Western Europe. All three of those are mature, stagnant markets given over to the ups and downs of the replacement cycle.

    Fiat is going where the money is and they are smart to do so. At the same time they pick up some capacity in a relatively low cost manufacturing area.

    Make all the snide and uninformed jokes you want folks, Fiat will get the last laugh with this one.

  • avatar
    mel23

    Too bad GM didn’t buy the rest of Fiat when Fiat wanted them too. Then GM could own Fiat and Yugo to go along with what they bought of Daewoo.

  • avatar
    ash78

    jthorner

    The flipside of that coin is that people in emerging markets have historically held onto their vehicles a lot longer than the 1st world. So while they may be getting their foot in the door on the first-time crowd, there’s something to be said (economically) for the fickle idiots in the US and western europe buying a new car every 2-5 years “because they’re tired of the old one”

  • avatar
    Vega

    @ash78: Even that doesn’t work anymore. The average vehicle age in Germany, of all places, is now above 7 years.

    Also, don’t underestimate the emerging markets’ willingness to trade up as soon as economic circumstances improve. Just like 1950-60s Germany: DKW 125cc motorbike -> Lloyd Alexander-> Beetle -> Opel Rekord -> Mercedes 200

  • avatar
    geozinger

    This is interesting news to me only in the respect that I thought I saw a news article last fall (October-November timeframe maybe) that GM had signed an agreement with Zastava (makers of the Yugo). IIRC, they bought some percentage of Zastava.

    The agreement was to produce the last-gen Opel Astra for emerging Eastern European and Russian markets. Something like a competitor to the Dacia Logan. I wonder whatever happened with that?

    What percentage does Zastava hold in Zastava?

  • avatar
    Martin Schwoerer

    jthorner: no jokesters we. (Hopefully, in particular, not snide or uninformed).

    This blog entry is about a) a news item and b) anticipated reactions to a news item. Preemtive humor, so to speak. We did not want to hurt the feelings of anybody who drives a Fiat or Yugo. They have been hurt enough already. I should know, I owned a Mirafiori in the 1980s, it was incredibly bad.

  • avatar

    now that’s funny!

  • avatar
    GS650G

    Fehler in allen Teilen

    German for fault in every part

    The Chinese have Russian Latvia cars that are copies of a Fiat as well. Ride in one to see just how bad a mechanical device can be.

  • avatar
    menno

    Even the Russian Lada (“built by Vodka drunks and ham-fisted robots – da ve build biggest microcomputer in vorld in Russia!”) was a better can than the Yugos sold in the UK back when I lived there. Heck, it was a close call between the Polish Fiats (FSOs) and Yugos…

    The most popular Yugos in the UK were the brand new hatchback-ized Fiat 128, which had been introduced in around 1969.

    We’re talking 1990, here, folks.

    But then, the Lada was based on a 1967 Fiat 124 sedan, and the Polksi Fiat (FSO) (or “Poxy Fiat” as my mate Glenn called his after he drove one/had it die an early death) was based on a 1966 Fiat 125 with a 1960 Fiat 1500 engine.

    In 1990. All the way through the mid 1990′s in fact.

    But then again, you could buy a new Eastern European, relatively speaking-comfortable five seat family car for 2800 pounds. About $4600 at the time.

    Of course, you could also buy the Skoda, which was a (“bouncing Czech”) copy of a 1959 Renault Dauphine, complete with rear swing axles and rear engine (and oil drip and rattle) for a little more (!)

  • avatar
    menno

    My colleague just saw the headline and was speechless.

    Once he got his voice back, we started talking about how the Yugo 55 was the only car which ever had the misfortune of going over the side of the Mackinaw Bridge here in Michigan.

    The Big Mac opened in 1957, only one car has ever gone over the side.

  • avatar
    Johnster

    menno: My colleague just saw the headline and was speechless.

    Once he got his voice back, we started talking about how the Yugo 55 was the only car which ever had the misfortune of going over the side of the Mackinaw Bridge here in Michigan.

    The Big Mac opened in 1957, only one car has ever gone over the side.

    A point of clarification. My understanding is that the car didn’t just go over the side of the bridge, because it was being driven recklessly, but that strong winds BLEW the car off the bridge (light weight, lack of aerodynamics and all).

  • avatar
    jthorner

    “people in emerging markets have historically held onto their vehicles a lot longer than the 1st world.”

    Ah, but people who’s incomes are rising rapidly like to keep on moving up the price & prestige ladder. Look at the development of the post war European market to see how it plays out. China and India today are in many ways where Germany was in 1950.

    There is nothing wrong, per se, with serving replacement markets, but that isn’t where the growing volumes and profits happen. A strong multi-national today might have it’s baseline business in an established market and it’s growth business in emerging markets. Intel, for example, sells less than 30% of it’s production into North American now. 20 years ago that number was over 80%.

  • avatar
    Rix

    FIAT is a highly profitable company with a fresh model line up and makes money selling cars based off of GM’s Corsa platform. Fiat sells a million of these a year. Yugo could very well be some more volume for their platforms. Or perhaps reuse old tooling…


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