Well, apparently it never happened. Yes the car was sold in some Spanish speaking countries but it was not a failure and there is no evidence that consumers mistook it to mean no va. See this informative article that debunks the mythic lore on http://www.snopes.com/ for more info.
The Snopes article goes on to make the point that the folks who spread the urban legend are doing the very same thing that the tale is finding fault with: Not doing adequate research before hand. There are a lot of marketing courses and books that cite this anecdote as proof of poor preparation / fact checking. I guess the material was created before Snopes was around. :-)
There is another legendary tale of linguistic snafus in marketing about a slogan from the vacuum company, Electrolux. The slogan was, "Nothing sucks like an Electrolux" and it was purported that due to the poor translation into English, that the ad hurt sales for the company. Well, that turns out to be another falsehood because where the slogan was promoted, the U.K., the word suck is not used, or at least it wasn't used back then, to mean "to do poorly", the exact opposite of the ad's intent.
Why have I brought to you these tales of marketing gone wrong do to loose translations? I have no idea. If you figure out the reason for me, leave a post. The most probable answer will win a prize!

