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The Yugo was a subcompact car for the American market made by the Zastava[?] automobile works in Kragujevac, Yugoslavia, 40 miles south of Belgrade, between 1986 and 1991. The car's design was very similar to the Fiat 128 sold in the USA during the 1970s, and was the product of a long-standing working agreement between Zastava and Fiat, a major Italian car maker.

Introduced in the summer of 1986 at a price of $3,990, it was by far the lowest-priced new car available in the USA at the time, and it sold very well at first. However, it soon developed a notorious reputation for being unreliable, and sales declined rapidly. In 1991, Zastava withdrew the car from the U.S. market when severe restrictions were placed on trade with Yugoslavia because of the human-rights violations of its then-current government.

Three models of Yugo were sold in the United States: the basic GV model, a hatchback version, and the Cabrio, a convertible. All shared a high-compression 67-horsepower engine designed by Fiat, which required the use of a high-grade motor oil designed for motorcycles to run properly. The failure of many Yugo owners to use the proper oil was part, but far from all, of the Yugo's problems.

Zastava still sells cars in many countries of Europe under both the Zastava and Yugo brand names.

Although the butt of many jokes even today, the Yugo, like other cars of the Communist era such as the East German Trabant, is a popular collectors' item.

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