Meet the '98 Beetle: Volkswagen rocks on with its nouveau-retro Bug - automobile industry

Automotive Industries, March, 1998 by Marjorie Sorge

Ferdinand Piech may be chairman of the world's fourth largest automaker, but he still has to drive his three kids to school. Not that he minds. It's an enjoyable time. Lately, the children seem to like it even better Dad's driving them in Volkswagen's New Beetle. They make me take them to the front door," he says, emphasizing that they want their friends to see this little car When Piech is testing other vehicles, the lads don't care much if he drops them down the street. That's the same reaction VW hoped for, and is getting in North America. At first blush the new Bug appears to be winning hearts. As it does, VW gets closer to its goal -- making its name a household word again in North America and pushing annual sales to 500,000. "In 1993, Volkswagen was a sad song in North America," Piech says. "we were just getting ready to drop out of this market with only 49,000 Volkswagens; and 12,000 Audis sold in the U.S."

In 1998, VW expects to sell 180,000 Volkswagens and 33,000 Audis in this country. Part of that will come from the 50,000 Beetles earmarked for the U.S. and 8,000 slated for Canada. "We envision a steady, double-digit growth pattern in the U.S. and Canada in the next couple of years," he says. VW hopes the Beetle enthusiasm will spill over to the Golf, Jetta and Passat.

Good plan, but will it work? What role will the Beetle really play? That all depends on whether this new small car has "legs," says David Cole, president of the Office for the Study of Automotive Transportation (OSAT) in Ann Arbor, Mich. "The advance orders look great," he says. "The question is not how well it does out of the shoot, but how will it do in four or five years. That is very uncertain. Having `legs' in this market depends on the execution of the vehicle in ergonomics and driving."

Plus, the Beetle competes in the tough small-car market, which is not exactly popular in the U.S. right now. Small car sales dropped about 25% in 1997. That segment also faces strong competition from mid-size vehicles. When the customer can buy a larger car for $18,000 to $20,000, the smaller $15,000 Beetle may not look as enticing, especially given its cramped back seat.

"One of the most intriguing stories of the year will be how the Beetle plays out," notes Cole.

The Program

VW first showed the Concept 1, which became the '98 Beetle, at the Detroit auto show in 1994. The response was so overwhelming insiders say that's what convinced Piech to look at bringing back the Beetle -- with some changes to the concept vehicle. But it wasn't an easy road for VW executives who championed the program.

The Bettle was not in the normal production plan and some in the company wanted to spend the dollars on "more rational cars," says Jens Neumann, board member in charge of North America. "They thought this was a purely emotional thing." Others claimed VW needed an emotional vehicle for North America. "Americans have all the rational cars, we needed something to revitalize the emotions," says Neumann.

So the pro-Beetle faction set out to prove its case. They did research an set up customer clinics. VW's Puebla, Mexico, plant wanted the vehicle so much Beetle champions there collected several hundred thousand signatures of people who wanted the new Beetle. "We had hard evidence on the one hand and an outpouring on the other. Eventually, people (all VW's Wolfburg headquarters) in Germany started to think, `yeah, maybe,'" recalls Clive Warrilow, president of Volkswagen of America.

Neumann led the charge. "He drove them crazy," Warrilow says, referring to Wolfsburg management. "We just kept the fire under him." That wasn't difficult -- Neumann loves the Beetle. He came to the U.S. as an exchange student in 1961, graduating from Quaker high school in Baltimore, Maryland. His yearbook picture shows him in a football uniform leaning on a Bettle.

In the end, the pro-Bettle faction won. Wolfsburg management approved the car in October 1994. Job One at Puebla was in December, 1997. VW spend about $1 billion on the Bettle, including manufacturing operations, says Neumann.

Who was against it? "I can only tell you that success has many fathers or mothers, and failure is an orphan," he says.

Design/Engineering

Concept 1 was based on the Polo platform, which was much too small for what VW had in mind for the production Beetle.

"We didn't think the Polo platform would ever be a read winner," says Neumann. "The shape is too close to the rear sear." So, by the end of 1994, engineers and designers moved to the larger Golf platform--Europe's No. 1 selling car.

Originally, VW outsourced part of the development to engineering firm Volcke in Wolfsburg, but brought it back inside to make certain the philosophy of the car was unchanged. The production New `Beetle' is pretty close to the original Concept 1 design, done by J. Mays, now head of Ford design, at VW's studio in California. Mays, however, wanted to keep it on the Polo platform. He admits he is disappointed with the final product. "It's got the wrong proportions," he told AI in December.