End of the road for the Volkswagen Beetle

Volkswagen is ending worldwide production of its iconic Beetle, the model once so popular in North America that it prompted the German carmaker to build its first factory on the continent in the 1960s.

The last one will roll off the line from the company's factory in the state of Puebla, Mexico, in July 2019.

VW had been pulling the Beetle from select markets as part of a broader effort by the German giant to rein in its bloated product range, which spans more than 300 different vehicles and variants, including heavy trucks, motorbikes and passenger cars.

Cutting back on product complexity is one of the key ways the company is trimming costs and getting leaner in the wake of its diesel emissions scandal.

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The compact Beetle was introduced in Germany in 1938 during the Nazi era before becoming a symbol of Germany's rebirth as a democratic, industrial powerhouse after the second World War.

It came to the US 11 years later, where it became a symbol of utilitarian transport for the postwar baby boom generation – often used by hippies.

The Disney effect

It was helped by a starring role of Herbie in the 1968 Disney film The Love Bug and featured in several follow-up films and a television series. Beetle buying in the US peaked the same year of the original Disney movie at about 423,000 units sold.

The famous car sold for about 30 years before US sales stopped in 1979, thopugh production continued continued production for Mexico and Latin America. The last of the original bugs was produced in Puebla, Mexico, in 2003.

In the mid-1990s, at a time when Volkswagen was struggling to rekindle sales in the United States, then chief executive Ferdinand Piech pushed to revive and modernise the distinctive Beetle design pioneered by his grandfather, Ferdinand Porsche. The result was a crescent-shaped car called the "New Beetle," launched in 1998, which offered playful touches such as a built-in flower vase.

The New Beetle was a hit during its early years, with sales of more than 80,000 in the United States in 1999, but recently the car’s US sales have suffered along with most other small cars. Overall, VW has sold about 500,000 Beetles globally since 1998, the company said.

Volkswagen sold a total of 11,151 Beetles in the United States through the first eight months of 2018, down 2.2 per cent from the same period a year earlier. US consumers looking for a small Volkswagen vehicle overwhelmingly prefer the Jetta sedan, or a Tiguan compact sport utility vehicle. The Jetta, Tiguan and Beetle are built for North America and other markets at a factory in Mexico.

Popular culture cachet

“The market is moving on,” said John Wolkonowicz, an independent auto analyst and industry historian in Boston. “The people who wanted them, mostly baby-boomer women, bought them, enjoyed them and they’re on to something else. Younger people don’t know what the point is.”

But the car may not go away for good: VW chief executive Herbert Diess has pondered reviving the Beetle as a fully electric car to tap the model’s popular culture cachet. VW has touted the upcoming ID Neo hatchback being rolled out in 2020 as the potential new Beetle for the electric vehicle age.

Mr Diess has been a driving force behind this slimming down since he started leading the main VW car brand in 2015. Demand for the Beetle and other hatchbacks like the Golf has come under pressure as customer appetite has shifted toward sport utility vehicles.

Seven decades

"The loss of the Beetle after three generations, over nearly seven decades, will evoke a host of emotions from the Beetle's many devoted fans," Hinrich Woebcken, chief executive of Volkswagen's US sales unit, said in a statement. While there are no immediate plans to replace the car with a next-generation version, he pointed to the ID Buzz – a modern interpretation of the legendary VW Bus – to hint that the Beetle could one day make a comeback. "Never say never," Mr Woebcken said.

VW shares rose 0.6 per cent to €141.62 at 9:34 a.m. in Frankfurt, giving a market value of €70 billion. – Bloomberg/AP/Reuters