OMG! A new car brand that's not Chinese and not electric? Yugo set to return to take on MG3, Toyota Yaris, Suzuki Swift and Mazda2 small hatchbacks

The little Yugo hatchback made by now long-gone Serbian brand Zastava Automobili appears to be making a return to a market that's increasingly being dominated by new Chinese brands, and in another twist, it won't be electric.

Made from 1980 to 2008 the Yugo was popular in the United States, India, Egypt and Eastern Europe. The little car was also sold in Australia before Zastava Automobili ended operations.

The Yugo brand, however, has been bought by German university professor, Dr Alexander Bjelic, who plans to resurrect the small hatch that's yet to be named.

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While a production version is still far off, Dr Bjelic used the recent 2025 Munich Car Design Event to show off a concept version. 

The catch is, it's a tiny scale model in a plastic box for now with Dr Bjelic aiming to have a full-size prototype ready for the 2027 Belgrade Expo. 

The model shows off the little hatch’s retro-cool looks with a modern twist on the Yugo hatch. 

The futuristic looks may be reminiscent of a tiny version of Hyundai's Ioniq 5 electric SUV, but Yugo says its upcoming car will be powered by an internal combustion engine. The brand said an electric variant may also become available at a later point.

Yugo concept model

Yugo concept model

Yugo concept model

Yugo concept model

The original Yugo hatch was known for its affordability but had a poor reputation for reliability and build quality. While the car was sold in Australia along with 76 other countries, it's uncertain whether the resurrected version will be sold in Australia.

If the Yugo hatch did make it Down Under it would be up against fierce tiny rivals such as Volkswagen's Polo, the Skoda Fabia, Toyota Yaris, Suzuki Swift, MG3 and Mazda2.

Still, if Yugo can price the car lower than its competitors and arrive with a design that looks as good as the concept then it could be onto a winner.