Fight as Fang
Successfully complete arcade mode with all characters (including Uranus and Kohryu). Keep selecting the "Random" option in arcade mode until Fang appears. Successfully complete the game in arcade mode as Fang to unlock him permanently at the character selection screen. Note: Fang is the third alternate costume of Yugo.
Highlight Yugo at the character selection screen and press Y once or twice until Fang's name appears.