Original VW Beetle losing ground

[bigpoppanils]

Long-Loved VW Bug Losing Ground In Last Frontier, Mexico

By AMY GUTHRIE

Of DOW JONES NEWSWIRES

MEXICO CITY -- The original Volkswagen Bug is heading toward extinction.

German car maker Volkswagen AG (E.VOW) still produces its flagship Beetle in Mexico, but a variety of factors are slowly weeding the model out of the market it once ruled.

New compacts from competitors like Ford Motor Co. (F) and General Motors Corp. (GM), as well as efforts by the Mexico City government to make its taxi fleet Bug-free, have been chipping away at the Beetle's share of new car sales.

Mexico is the last frontier for the most popular model in automobile history, after Brazil stopped manufacturing the Beetles in 1996. The Bug's affordability cemented it into Mexican culture, making the car more than just a 20th century icon south of the Rio Grande. Mexicans still maintain that the austere cars they grew up on are excellent. They're just ready to move on.

In the first four months of 2003, Volkswagen sold 3,850 of the "old" Beetles , less than half of the 9,450 it sold in the same period of last year. The declines follow a 39% slide in the Bug's 2002 sales.

Volkswagen's central Mexican plant is turning out about 50 Beetles per day, down from several hundred in the early 1990s when the car maker sold upward of 100,000 of the Beetles annually. The New Beetle - introduced in 1998 - is also exclusively manufactured in Mexico, although with a price tag starting around $17,000, Volkswagen only sold 867 of them in Mexico during the first four months of 2003.

Even though the sun appears to be setting on Mexico's love affair with the original Bug, known affectionately as a "Vocho" in Mexico, Volkswagen is reluctant to pull the plug on production. The company's union leader in Mexico said he has been assured that workers will be hammering out the little critters at least through 2003.

"Demand in the national market is still significant enough to maintain the line," said Jose Luis Rodriguez, head of the 10,000-strong union.

About 350 employees, some of whom have been with the Volkswagen plant since it opened outside of Puebla, Mexico in 1967, are dedicated to the production of the "old" Beetle . After more than 35 years of assembling the cars, often manually, the model has become like a baby to these workers.

Volkswagen began selling its Bugs in Mexico in 1954. Then, in the 1960s, the Mexican government required car makers to set up manufacturing facilities in the country in order to sell in the domestic market, and Volkswagen broke ground on its Puebla plant.

VW Bug Gave Mexicans Their Wheels

More than just a car, the Beetle came to symbolize motorization in Mexico. Over 1.5 million of the roughly 22 million Beetles Volkswagen has sold in its 67-year history went into the Mexican market.

"For a long time it was the most accessible car in the market. It motorized the people," said Thomas Karig, director of corporate relations and strategy for Volkswagen in Mexico.

But the Bug's glory days have ended.

"There's much more to offer in Mexico's automotive sector now, including within our own range of models at Volkswagen," Karig said.

A basic "old" Beetle retails at roughly $6,540, or only slightly less than the $7,300 price tag on a four-door Volkswagen Pointer.

For now, Mexico still has enough Beetles on the road to make any game of "punchbuggy," or "slugbug" - hitting your riding companion on the arm every time a Volkswagen Beetle passes - absolutely brutal. However, the cars are being retired from one very large segment in Mexico that adopted the vehicle: public transport.

Metropolitan Mexico City, home to nearly one quarter of the country's population, has an estimated 100,000 Volkswagen Beetles operating as taxi cabs. Most are painted green with their front passenger seats removed. Many are also past their prime, and contribute to the capital's already high air pollution levels.

The city government launched a credit program last year to help taxi drivers trade their Bugs in for new four-door vehicles. Taxi drivers have grumbled about the change, which is obligatory for Beetles that are more than 10 years-old, while waxing nostalgic over their many hours spent in the little cars. Still, most say they are ready for the new era.

"I'm not changing by choice. The Vocho is phenomenal," said Mario Garcia, 45, a taxi driver in Mexico City.

"With all the protests and traffic in this city, a lot of cars overheat. But it's very unusual to see one of these break down," Garcia added, pointing to his 1992 Beetle .

Still, Garcia says he is excited about upgrading to a four-door Pointer.

Likewise, driver Guillermo Luna, 42, says he won't miss his 1995 Bug all that much: "In terms of service, I think a four-door is more comfortable. It'll be just as reliable."

Company Website: www.vw.com.mx

-By Amy Guthrie, Dow Jones Newswires; (5255) 5080-3453;

amy.guthrie@dowjones.com

Updated May 27, 2003 1:10 p.m.

[teklord310]

:laugh:

WOW I didn't know that... That is why I saw hundreds of those little spics driving those little shits around town. I thought they were from the 60s. Tons of beetles everywhere, it was rediculous.

I'm not surprised they are canning the line... I can't believe it took them 30 years to realize u can't ft 15 mexicans in a beetle.

BTW - yes mexicans actually do ride in the backs of pickup trucks down there. funny as hell. Cops do it too!