Volk­swa­gen kills Bee­tle: Bug pro­duc­tion to end

Los Angeles Times - - BUSINESS BEAT -

Volk­swa­gen is end­ing world­wide pro­duc­tion of its iconic Bee­tle, the model once so pop­u­lar in North Amer­ica that it prompted the Ger­man au­tomaker 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.

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 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.

Chief Ex­ec­u­tive Her­bert Diess has been a driv­ing force be­hind this slim­ming since he started lead­ing the main VW car brand in 2015. De­mand for the Bee­tle and other hatch­backs such as the Golf has waned as cus­tomer ap­petite has shifted to­ward sport util­ity ve­hi­cles.

“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.”

The Bee­tle played the star­ring role of Her­bie in the 1968 Dis­ney film “The Love Bug.” The sen­tient race car sport­ing red, white and blue rac­ing stripes head­lined sev­eral fol­low-up films and a tele­vi­sion se­ries.

Bee­tle buy­ing in the United States peaked the year of the orig­i­nal Dis­ney movie at about 423,000 units sold. The car be­came a phe­nom­e­non again in the 1990s when VW brought it back to Amer­ica af­ter a 20-year lapse. Last year, VW de­liv­ered just 15,166 units — fewer than one-sev­enth the sales of the Jetta sedan. SUVs, mean­while, are cap­tur­ing a record share of the mar­ket.

“The nos­tal­gia for the ’60s is go­ing away as the baby boomer gen­er­a­tion is go­ing away,” Wolkonow­icz said. “Most baby boomers are get­ting older and need some­thing easy to get in and out of. Crossovers are easy to get in and out of. Cars are not.”

Putting the Bee­tle out to pas­ture en­ables VW to pro­duce more of the other mod­els built in Puebla, in­clud­ing the Jetta sedan and Tiguan SUV.

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

“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, CEO of Volk­swa­gen’s U.S. sales unit, said in a state­ment.

Although there are no im­me­di­ate plans to re­place the car with a next-gen­er­a­tion ver­sion, he pointed to the I.D. Buzz — a mod­ern in­ter­pre­ta­tion of the leg­endary VW Bus — to hint that the Bee­tle could one day make a come­back.

“Never say never,” Woe­bcken said.

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