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Last Updated: Monday, 28 July, 2003, 23:19 GMT 00:19 UK
Beetle production ends at last

By Jorn Madslien
BBC News Online business reporter

VW Beetle
The distinctive VW Beetle
The last old-style Volkswagen Beetle is to roll off the production line on Wednesday, 64 years after it was first produced. But the car is refusing to depart in silence.

As the movie star "Herbie" retires, it has become obvious that its heritage will remain vibrant.

The Beetle has achieved an unbelievable cult status across the world, not least because its creation marked the launch of what has since become the largest car company in Europe.

"It was the first product they ever made," said Sanford C. Bernstein's European car analyst, Stephen Cheetham.

"It was the only car Volkswagen made for ages."

Reliance

In fact, although VW made a range of larger vehicles during the 1950s and 1960s, the Beetle was only replaced in the early 1970s.

See Beetle photos from the Volkwagen archive

And not before time.

"Like all companies that discover a money-making machine, they were loath to let the Beetle go," said Jay Nagley, a consultant at Spyder Automotive.

The Beetle was hugely popular in Germany during the 1950s. And when its popularity at home began to fade during the 1960s, it was taken on by the Flower Power generation in the United States.

But by the end of the decade, VW's reliance on the Beetle was bearing heavily on the car maker, Mr Nagley explained.

Golf

VW desperately needed another "people's car", a car for the masses.

VW Golf
The fifth generation Golf will go on sale in 2004

And in 1974 it found one, when the Italian designer Giorgetto Giugiaro came to the rescue with the somewhat boxy Golf.

Mr Giugiaro's company Ital Design sold the design to VW, and the golf has been Volkswagen's flagship model ever since, Mr Cheetham said.

"Until a few years ago, VW was effectively the Golf Motor Company," said Mr Nagley.

Tough competition

The Golf has defined the market for mass-produced hatchback cars and has firmly established itself as the leader of the pack in this segment.

The Beetle years
1937-45: Gesellschaft zur Vorbereitung des Deutschen Volkswagens is founded to build the car designed by Ferdinand Porsche. WWII interrupts production as the factory instead produces for the Nazi military.
1945-49: VW is transferred to the British Military Government after WWII, Beetle mass production begins in earnest under Major Ivan Hirst.
1949-1970: VW is transferred to the German government, VW targets the Americas
1970-1990: The Passat and the Golf are launched, production of the Beetle is shifted to Mexico. The car enjoys a second lease of life in Latin America.
1990-2003: The New Beetle is launched, the Beetle prepares for retirement.

Not a bad move, given that this is, in the words of Mr Cheetham, "typically the most profitable segment for car makers".

Recently, Ford's Focus and Opel's or Vauxhall's Astra have seriously challenged the Golf's hegemony. But the German is about to hit back with its fifth generation Golf, due to go on sale next year.

Traditionally, the Golf has managed to stay ahead due to its "unique position as an upmarket massmarket car", said Mr Nagley.

Diversified

But the Golf is no longer everything to VW Group.

YOUR PICTURES
You sent us snaps of your Volkswagen Beetles

In recent years, VW's dependence on one model has been sharply reduced.

As a consequence, new problems have emerged.

"VW as a group now has too many models, and too many overlapping models at that," insisted Mr Nagley, pointing out that VW owns Audi, Skoda and Seat in addition to Volkswagen.

And it owns the somewhat more luxurious brands Bentley, Bugatti and Lamborghini.

Clearly, Volkswagen Group has grown well beyond its origins as the maker of Adolf Hitler's "people's car".

But in the process, the car maker seems to have lost its way, many observers argue.

Even its New Beetle is pooh-poohed by analysts.

"The New Beetle is, I would argue, an awful thing," said Mr Cheetham.

VW's finances have suffered too; on Friday the group reported that its profits have fallen sharply during spring.

VW's operating profits fell to 616m euros ($709m;436m) during the April to June quarter from 1.4bn euros ($1.6bn; 991m) a year earlier. Pre-tax profits fell 46% to 679m euros.


SEE ALSO:
Beetle-maker lays off 2,000 staff
30 Jun 03  |  Business
End of the road for the Beetle
06 Jun 03  |  Business
Profits fall at Volkswagen
19 Feb 03  |  Business
Volkswagen recalls 850,000 cars
04 Feb 03  |  Business


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