History of Volkswagen

(Continued from Main Page)

Though the origins of the company date back to the 1930s, the design for the car that would become known as the Beetle / "Käfer" date back even further, as a pet project by car designer Ferdinand Porsche (1875–1951). Adolf Hitler's desire that almost anybody should be able to afford a car coincided with this design—although much of this design was inspired by the advanced Tatra cars of Hans Ledwinka.

Hitler, who had a keen interest in cars even though he didn't drive, demanded Porsche make changes to the original design to make it more suited for the working man. According to the historian Richard Evans, Hitler personally designed the distinctive rounded shape of the car he desired Porsche to build - making the Volkswagen "Beetle" Hitler's most lasting legacy to the world. Changes included better fuel efficiency, reliability, ease of use, and economically efficient repairs and parts. The intention was that ordinary Germans would buy the car by means of a savings scheme ("Fünf Mark die Woche musst Du sparen, willst Du im eigenen Wagen fahren" — "Save five Marks a week, if you desire to drive your own car") which around 336,000 people eventually paid into. Volkswagen honored its savings agreements after World War II; Ford, which had a similar "coupon" savings system, reportedly did not. Prototypes of the car called the KdF-Wagen (German: Kraft durch Freude = "strength through joy"), appeared from 1936 onwards (the first cars had been produced in Stuttgart). The car already had its distinctive round shape and air-cooled, flat-four, rear-mounted engine, features similar to the Tatra. The VW car was just one of many KdF programs which included things such as tours and outings.

Erwin Komenda, the longstanding Porsche chief designer, developed the car body of the prototype, which was recognizably the Beetle we know today. It was one of the first to be designed with the aid of a wind tunnel; unlike the Chrysler Airflow, it would be a success.

The new factory in the new town of KdF-Stadt, now called Wolfsburg, purpose-built for the factory workers, only produced a handful of cars by the time war started in 1939. None were actually delivered to holders of the completed saving stamp books, though one Type 1 Cabriolet was presented to Hitler on his fiftieth birthday, in 1938.

War meant production changed to military vehicles, the Type 81 Kübelwagen utility vehicle (VW's most common wartime model) and the amphibious Schwimmwagen.

The company owes its postwar existence largely to one man, British Army officer Major Ivan Hirst (1916–2000). In April 1945, KdF-Stadt and its heavily bombed factory were captured by the Americans, and subsequently handed over to the British, within whose occupation zone the town and factory fell. The factory was placed under the control of Oldham-born Hirst. At first, the plan was to use it for military vehicle maintenance. Since it had been used for military production, and had been a "political animal" (Hirst's words) rather than a commercial enterprise, the equipment was in time intended to be salvaged as war reparations.

Hirst painted one of the factory's cars green and demonstrated it to British Army headquarters. Short of light transport, in September 1945 the British Army was persuaded to place a vital order for 20,000. The first few hundred cars went to personnel from the occupying forces, and to the German Post Office. By 1946 the factory was producing 1,000 cars a month, a remarkable feat considering the factory was still in disrepair: the damaged roof and windows meant rain stopped production; the steel to make the cars had to be bartered for new vehicles.

The car and its town changed their Second World War-era names to Volkswagen and Wolfsburg respectively, and production was increasing. It was still unclear what was to become of the factory. It was offered to representatives from the British, American and French motor industries. Famously, all rejected it. After an inspection of the plant, Sir William Rootes, head of the British Rootes Group, told Hirst the project would fail within two years, and that the car "is quite unattractive to the average motorcar buyer, is too ugly and too noisy ... If you think you're going to build cars in this place, you're a bloody fool, young man." (In a bizarre twist of fate, Volkswagen would manufacture a locally built version of Rootes' Hillman Avenger in Argentina in the 1980s, long after Rootes went bust at the hands of Chrysler in 1978—the Beetle outliving the Avenger by over 30 years)

Ford representatives were equally critical: the car was "not worth a damn." Henry Ford II, the son of Edsel Ford, did reportedly look at the possibility of taking over the VW factory but dismissed the idea as soon as he looked up Wolfsburg on the map. . . and found it to be too close for comfort to the East German border. In France Citroën started the 2CV on a similar marketing concept. In Italy it was the Fiat 500.

From 1948, Volkswagen became a very important element, symbolically and economically, of West German regeneration. Heinrich Nordhoff (1899–1968), a former senior manager at Opel who had overseen civilian and military vehicle production in the 1930s and 1940s, was recruited to run the factory in 1948. In 1949 Hirst left the company, now re-formed as a trust controlled by the West German government. Apart from the introduction of the Type 2 commercial vehicle (van, pickup and camper) and the Karmann Ghia sports car, Nordhoff pursued the one-model policy until shortly before his death in 1968.

Volkswagens were first exhibited and sold in the United States in 1949. It only sold two units in America that first year. On its entry to the U.S. market, the VW was briefly sold as a "Victory Wagon". Volkswagen of America was formed in April 1955 to standardize sales and service in the U.S. Production of the Type 1 Volkswagen Beetle (German: "Käfer"; US: "Bug"; Mexican: "Vocho"; "Vochito"; French: "Coccinelle"; Portuguese: "Carocha"; Brazilian: "Fusca"; Colombian and Venezuelan: "Escarabajo"; Danish: "Boble Folkevogn"; Polish: "Garbus"; Serbian/Croatian: "Buba"; Swedish: "Bubbla Folka": Dutch: "Kever"; Finnish: "Kupla"; Indonesian:"Kodok") increased dramatically over the years, the total reaching one million in 1954.

Sales soared -- due in part to the famous advertising campaigns by New York advertising agency, Doyle, Dane and Bernbach. Lead by art director Helmut Krone and copywriters Bob Levinson and Julian Koenig, Volkswagen ads became as popular as the car, using crisp layouts and witty copy to lure the younger, sophisticated consumers with whom the car became associated. Despite the fact it was almost universally known as the Beetle, it was never officially labeled as such, instead referred to as the Type 1. The first reference to the name Beetle occurred in U.S. advertising in 1968, but not until 1998 and the Golf-based New Beetle would the name be adopted by Wolfsburg.

During the 1960s and early 1970s, although the car was becoming outdated, American exports, innovative advertising and a growing reputation for reliability helped production figures to surpass the levels of the previous record holder, the Ford Model T. By 1973 total production was over 16 million.

VW expanded their product line in 1967 with the introduction of several Type 3 models, which were essentially body style variations (Fastback, Notchback, Squareback) based on Type 1 mechanical underpinnings, and again in 1969 with the relatively unpopular Type 4 (also known as the 411 and 412) models, which differed substantially from previous models with the notable introduction of unibody construction, a fully automatic transmission, electronic fuel injection, and a sturdier powerplant. Volkswagen added a "Super Beetle" (the Type 113) to its lineup in 1971. The Type 113 differed from the standard Beetle in its use of McPherson strut front suspension instead of torsion bars. The McPherson suspension added valuable trunk space and widened the front end. Despite the Super Beetle's popularity with Volkswagen customers, purists preferred the standard Beetle with its less pronounced nose and its original torsion bar suspension. In 1973, Volkswagen introduced the military-themed Thing (Type 181) in America, recalling the wartime Type 81. The military version was produced for the NATO-era German army (Bundeswehr) during the cold war years of 1970 to 1979. The US Thing version only lasted two years, 1973 and 1974, due at least in part to Ralph Nader's automobile safety campaigns.

Volkswagen was in serious trouble by the end of the 1960s. The Type 3 and Type 4 models had been comparative flops, and the NSU-based K70 also failed to woo buyers. The company knew that Beetle production had to end one day, but the conundrum of replacing it had been a never-ending nightmare. The key to the solution was the 1964 acquisition of Audi/Auto-Union. The Ingolstadt-based firm had the necessary expertise in front wheel drive and water-cooled engines that Volkswagen so desperately needed to produce a credible Beetle successor. Audi influences paved the way for this new generation of Volkswagens, known as the Polo, Golf and Passat.

Production of the Beetle at the Wolfsburg factory switched to the VW Golf in 1974, marketed in the United States and Canada as the Volkswagen Rabbit until 1985 and as the Golf until 2006, when the Rabbit name was again announced. This was a car unlike its predecessor in most significant ways, both mechanically as well as visually (its angular styling was designed by the Italian Giorgetto Giugiaro). Its design followed trends for small family cars set by the 1959 Mini and 1972 Renault 5—the Golf had a transversely mounted, water-cooled engine in the front, driving the front wheels, and had a hatchback, a format that has dominated the market segment ever since. Beetle production continued in smaller numbers at other German factories (Essen) until 1978, but mainstream production shifted to Brazil and Mexico.

While Volkswagen's range of cars soon became similar to that of other large European automakers, the Golf has been the mainstay of the Volkswagen lineup since its introduction, and the mechanical basis for several other cars of the company. There have been five generations of the Volkswagen Golf, the first of which was produced from the summer of 1974 until the end of 1983, sold as the Rabbit in the United States and Canada and as the Caribe in Latin America. Its chassis also spawned the Scirocco sport coupe and Jetta sedan. North American production of the Golf/Rabbit commenced at a factory in Pennsylvania in 1978. The production numbers of the first-generation Golf has continued to grow annually in South Africa with only slight modifications to the interior, engine and chassis. It would be produced in the United States as the Rabbit until the spring of 1984. The second-generation Golf hatchback/Jetta sedan ran from late 1983 to late 1991, and a North American version produced in Pennsylvania went on sale at the start of the 1985 model year.

In the eighties, Volkswagen's sales in the United States and Canada fell dramatically, despite the success of models like the Golf elsewhere. The problems had stemmed from the Rabbit, which had developed a reputation for bad electrical systems and oil burning. The Japanese and the Americans were able to compete with similar products at lower prices. Sales in the United States were 293,595 in 1980, but by 1984 they were down to 177,709. [2]. The introduction of the second-generation Golf, GTI and Jetta models helped Volkswagen briefly in North America. Motor Trend named the GTI its Car of the Year for 1985, and Volkswagen rose in the J.D. Power buyer satisfaction ratings to eighth place in 1985, up from 22nd a year earlier. [3] VW's American sales broke 200,000 in 1985 and 1986 before resuming the downward trend from earlier in the decade. Chairman Carl Hahn decided to expand the company elsewhere, and the Pennsylvania factory closed on July 14, 1988. Meanwhile, Hahn expanded the company by purchasing a greater share of the Spanish carmaker SEAT, which VW bought outright in 1990; the Cezch carmaker Skoda was acquired the following year.

In 1991, Volkswagen launched the third-generation Golf, garnering the European Car of the Year for 1992 (the previous two generations were nominated but lost to the Citroën CX in 1975 and the Fiat Uno in 1984). (The Mark 3 Golf and Jetta debuted in North America just before the start of 1994 model year, first appearing in southern California in the late spring of 1993.) The sedan version of the Golf was badged Vento in Europe (but remained Jetta in the USA, where its popularity outstripped the Golf).

The fourth incarnation of the Golf arrived in Europe in late 1997, (and in North America in 1999), its chassis spawned a host of other cars within the Volkswagen group—the Volkswagen Bora (the sedan, still called Jetta in the USA), VW New Beetle, SEAT Toledo, SEAT León, Audi A3, Audi TT and Skoda Octavia. However, it was beaten into third place for the 1998 European Car of the Year award by the winning Alfa Romeo 156 and runner-up Audi A6. The current Volkswagen Golf was launched in late 2004, came runner-up to the Fiat Panda in the 2004 European Car of the Year, and has so far spawned the new generation SEAT Toledo, Skoda Octavia and Audi A3 hatchback ranges as well as a new mini-MPV, the Seat Altea. The fifth-generation Golf was introduced in Europe in late 2003, and the GTI boasts a 2.0 L Turbocharged direct injection engine. The fifth-generation Golf, now with the Rabbit name once again, went on sale in the U.S. and Canada in June 2006. (The GTI version arrived in North America four months earlier.) Volkswagen of America believes that returning to the Rabbit nameplate will help the Golf's sales in these two countries. The fifth-generation Jetta, and the performance version, the GLI, are also available in the United States and Canada.

The other main models have been the Polo, a smaller car than the Golf, and the larger Passat for the segment above the Golf. As of 2006, there have been four incarnations of the Polo: Mk 1 (1976), Mk 2 (1981, facelifted 1990), Mk 3 (1994, facelifted 1999) and the current Mk 4 (2002, facelifted 2005). The Scirocco and Corrado were both Golf-based coupés.

By the early nineties, Volkswagen's sales in the United States were below 100,000, and many car buyers found the company's products to be lacking in value. Some automotive journalists believed that Volkswagen would have to quit the North American market altogether. VW eventually realized that the Beetle was the heart and soul of the brand in North America, and the firm quickly set about creating a new Beetle for American and Canadian showrooms.

In 1994, Volkswagen unveiled the J Mays-designed Concept One, a "retro"-themed car with a resemblance to the original Beetle but based on the Polo chassis. Its genesis was secret and in opposition to VW management, who felt it was too backward-looking. Management could not deny the positive public response to the concept car and gave the green-light to its development as the New Beetle. The production car would be based on the Golf rather than the Polo, because the Polo chassis was too small for the car to pass crash test standards in the U.S. It has been quite popular in North America, less so in Europe.

In 2002, Volkswagen announced two models taking it into market segments new to the company: the Phaeton ("Fay-ton") luxury car, and the Touareg ("Tour-egg") SUV. The Phaeton was critically acclaimed but not well received in the marketplace. In 2005 VW announced its discontinuance in the US market for fall 2006, mainly due to the disappointing sales there and the need for major investments in the car's line of engines (W12 and V8) to meet new emission requirements. Also, Volkswagen has faced harsh criticism that the Phaeton had used up money that was better invested in their smaller cars.

Volkswagen's fortunes in North America improved once the third-genration Golf and Jetta models became available there. Sharp advertising and savvy promotional stunts, like including Trek bicycles and accompanying bike racks with a limited ediiton of the 1996 Jetta sedan, were credited for the firm's recovery in the U.S. and Canada, but the introductions of the New Beetle and the fifth-generation Passat were a major boost to the brand.

After rising significantly between 1998 and 2001, though, VW's North American sales began to fall sharply leading to a 2005 loss of roughly $1 billion (U.S.) for its operations in the U.S. and Canada. The reliability of the company's cars appears to bear some of the responsibility for this situation. By 2005, its models sat near the bottom of Consumer Reports and J.D. Power reliability rankings.

Volkswagen is still in a better position in the North American market than it was in the early nineties, when its U.S. sales plummeted to 49,533 units in 1993. The company hopes to remain competitive in the U.S. and Canada with several new models. The fifth-generation GTI has generated interest among the VW faithful with its "Make friends with your fast" and "Unpimp My Ride" advertising campaigns. And although its reliability remains to be determined, the GTI was named by Consumer Reports as the top sporty car under $25,000. Even more encouraging was Volkswagen's performance in the 2006 J.D. Power study of satisfaction after ninety days of ownership. VW scored highest among "nonluxury" brands, finishing fourteenth overall with strong performances by its new Jetta and Passat models.

Volkswagen is also adding the Eos, a sport coupe with a convertible hardtop, to its U.S./Canadian lineup as well. The Rabbit, GTI, are also being made in Germany and the Eos in Portugal for the North American market. These production points are used instead of producing in the VW's Mexican factory in Puebla, where Golfs(1993 to 1998) and Jettas were produced and also replacing the Brazilian factory in Curitiba where Golfs and GTIs were produced (1999 to 2006).

Volkswagen is counting on better workmanship from its German plants to improve the reliability of its North American lineup, and it is also competitively pricing its Rabbit, with a base model starting below the average cost of a new automobile. Volkswagen's relations with its unions and its relationship with the government of the German state of Lower Saxony, which owns stock in VW, remain impediments to further progress. But the company is taking a greater interest in the North American market rather than treating it as an afterthought. As of August 2006, the strategy seemed to be paying off, as VW's U.S. sales for the first eight months of the year were up over the period from January to August 2005, due in part to initially brisk sales of the Rabbit.

Volkswagen has offered a number of its vehicles with an advanced, light duty diesel engine known as the TDI (Turbo Direct Injection). Whilst extremely popular in the European market, light duty diesels do not yet enjoy the same wide acceptance in the American marketplace, despite increased fuel economy and performance comparable to gasoline engines due to turbocharging. According to the U.S. Environmental Protection Agency, 4 of the 10 most fuel efficient vehicles available for sale in the U.S. in 2004 were powered by Volkswagen diesel engines. They were a three-way tie for 8th (TDI Beetle, TDI Golf, TDI Jetta) and 9th, the TDI Jetta Wagon. Sales of light duty diesel engine technology are increasing as gasoline prices rise. Products such as the Toyota Prius might have highlighted the economy of non-gasoline engines, but in reality, a Volkswagen TDI engine is often found to be more efficient than the Prius on the highway (although not so when driving in the city). In addition, all VAG TDI diesel engines produced since 1996 can be driven on 100% biodiesel. For the 2007 model year, however, strict U.S. government emissions regulations have forced VW to drop most diesels from their U.S. engine liuneup, but a new lineup of diesel engines compatible to U.S. standards are due for 2008.

Volkswagen long resisted adding an SUV to its lineup, but it finally relented with the introduction of the Touareg in the early 2000's. The company plans to add a miniature SUV, based on its "Concept A" concept vehicle, soon. On July 20, 2006, VW announced that the new vehicle would be called the Tiguan. One major irony of Volkswagen's current North American lineup is the absence of a minivan, considering that VW is credited for inventing the minivan with its original Transporter, but the firm is currently devloping just such a vehicle for the U.S. and Canadian markets with DaimlerChrysler, with current plans to introduce it some time in 2008. The Touran microvan remains a possibility for the North American market should such a class of passenger vans become lucrative on that continent. So far that has not happened.

One North American lineup change that may happen is a new entry-level model for the North American lineup below the Rabbit, the likes of which Volkswagen has not sold in the U.S. or Canada since 1993. A venture with DaimlerChrysler to produce such a vehicle was considered but dropped as of September 2006. North American Volkswagen fans continue to hold out hope for the Polo, or at least a Polo-related vehicle from Latin America, to be introduced here.