The New Yugo Actually Looks Really Cool

Earlier in 2025, a group of investors took everybody by surprise when they announced plans to resurrect the long-dormant Yugo brand. The news broke in February; It wasn’t an April Fool’s joke. At the time, sketches released by the company showed a small hatchback with a sharp-looking design and a handful of heritage-inspired styling cues. Fast-forward to May, and we know what the new Yugo will look like.

The company traveled to the Car Design Event 2025 held in Munich, Germany, to show a 1:5-scale model of its upcoming econobox. And, jokes and history aside, we like what we see so far. Broadly speaking, the model stays true to the sketches released earlier this year. It’s not a Xerox copy of the original Yugo, which was related to the Fiat 128. Instead, it looks like the logical continuation of its predecessor. It’s still a fairly small two-door hatch, it features a modern-looking front end with lots of LEDs, and its rear end gets an updated interpretation of the original Yugo’s rectangular lights. It’s not full-on retro like the Volkswagen ID. Buzz, for example.

It doesn’t look like the model has an interior, which isn’t surprising. The project remains at the embryonic stage of development. However, the company has already clarified that it will launch the new Yugo with an internal combustion engine available with either a manual or an automatic transmission. Some kind of electrified drivetrain might join the range later in the production run, according to Top Gear. And, while the two-door layout is the only one currently intended for production, Yugo added that it’s open to reviving the convertible model.

Assuming everything goes according to plan, the new Yugo will occupy an empty niche on the European new-car market. Its small size will place it in the same segment as the Renault Clio and the Volkswagen Polo, among other cars, but it will stand out as the only two-door model. And, if the convertible goes into production, it will be the only drop-top in its segment. Would either body style sell? Time will tell. After all, Renault, Volkswagen, and their peers and rivals have gradually dropped small two-door hatchbacks regardless of roof type due to slow sales. Renault hasn’t sold a two-door Clio in over a decade. The Polo went four-door-only on the European market when the sixth-generation model made its debut in 2017.

We’re excited for the new Yugo, but let’s not put the cart in front of the horse. Launching a new car brand is a massive undertaking, even if the endeavor is rooted in heritage and relatively well-funded, Yugo still has numerous big and small hurdles to clear before it puts a car in a showroom. It needs to figure out how to build it while keeping it affordable, which is one of the project’s goals. It also needs to line up a roster of suppliers and a distribution channel. In the meantime, the brand will continue to develop its first car in the coming months, and it plans to unveil its first functional prototype at the 2027 Belgrade Expo.