The world of small, affordable cars has been shrinking, with models like the Ford Fiesta and Mazda 2 recently discontinued. But there’s a new player looking to shake things up — and it’s a name you probably didn’t expect: Yugo. Yes, that Yugo.
The once infamous car brand from the former Yugoslavia is making a surprise comeback, this time with a stylish nod to the 1980s and a clear eye on modern expectations. Leading the revival is Dr. Aleksandar Bjelić, a university professor who has acquired the rights to the Yugo name under his new venture, Yugo Automobile. He’s brought on Serbian car designer Darko Marčeta to reimagine what a 21st-century Yugo should look like.
Unveiled as a 1:5 scale model at the Car Design Event in Munich, the new Yugo channels the unmistakable boxy design of the original — which itself borrowed heavily from the Fiat 127 and 128 — but adds sleek, modern updates. Think slim LED lighting, large alloy wheels, and smooth, flush door handles. Despite its retro silhouette, this is no museum piece.
The familiar ‘Y’ badge returns, and the car’s chunky grille and sharply angled rear hatch give it a bit of Hyundai Ioniq 5 flair. Unlike most modern superminis like the Toyota Yaris, Renault Clio, and Honda Jazz — all now strictly five-door — the reborn Yugo will launch as a two-door model, though additional body styles are on the table.
Set to compete in the B-segment, the new Yugo promises to be an “affordable small car,” staying true to the original’s budget-conscious roots. It will debut with an internal combustion engine and offer both manual and automatic transmissions — a rare move in an increasingly electrified world. That said, Yugo Automobile isn’t ruling out an electric version down the line, although no EV specs have been shared yet.
While the old Yugo earned a rough reputation — often criticized for rust, reliability, and landing on lists of the worst cars of the Cold War era — the new version aims to turn that legacy on its head. According to Yugo Automobile, it will meet modern safety standards and offer a “fun-to-drive” experience. It will also be built on a “proven platform” from a still-unnamed partner.
The production-ready version is scheduled for an official reveal on 15 September 2025, with a fully finished prototype to follow at the Belgrade Expo in 2027.
A punchline of the past is now looking for a second act — and this time, the Yugo might just be taken seriously.
