I just imagine licensing it isn't easy.
It actually might not be too difficult as the maker, Zastava, actually produced them until 2008 as the Zastava Koral. Zastava was also bought out by Fiat in 2008, so T10 already has a relationship with the likely license holder.
There may be issues getting one in good enough shape to model though.
Where did I leave that gif..., oh here it is:
Not sure the gif fits, as it's not entirely out-worldly to expect cars in a car game. Not really that big of an expectation, to be honestWhere did I leave that gif..., oh here it is:
The Yugo in the trailer is debadged, and given the condition of the rest of the car that seems quite deliberate. I get the feeling Microsoft wanted a "generic crappy car" for comic relief and that's the one they found.