New Market for Volkswagen

Germany and the world was more prosperous in the 1960’s than in the 1950’s. People were buying new homes, bigger cars, and enjoying life more than ever before. Volkswagen, never one to miss an opportunity, began thinking about a successor to the economy-class Beetle in the mid-to-late 1950's. At the time, they were getting a great deal of slack from both the public and press because of the Beetles outdated basic design. VW also knew they needed to enter into the middle-class marketplace. By offering a series of models with more power, comfort, standard equipment, and room, VW hoped to offer the thousands of Beetle owners an upgrade path. Of course, an upscale car would have a higher price as well, and VW hoped to capitalize on the new prosperity.

So, to respond to this need, in 1958 VW designers began working on a new series of cars while trying to keep the basic VW principles of economy, durability and functionality intact. The goal was creating a line of mid-market cars. By relocating the fan shroud of the Type I engine and running the fan off of the crankshaft, VW designers came up with an engine layout that allowed space in the rear of the car to be used for an additional luggage compartment. This new "pancake" engine design satisfied the additional luggage space requirement. Stylists squared off the body, allowing for more interior space and comfort. The marketing department also added several features to the list of standard equipment; features that were previously non-existent or optional extras on the Beetle and its low priced competitors.

The models that VW proposed for this new VW 1500 series were the basic sedan, station-wagen, and a sports coupe. The plan for the 1500 series also included building a convertible based on both the sedan and the Karmann Ghia. There were no plans for the new series to replace the current models, but simply to be an additional option for prospective VW buyers that wanted something more than the standard Beetle or Karmann Ghia. Also, production of the Beetle at the Wolfsburg factory was at its higher point in the late 1950’s, and showed no signs of weakening, so VW knew that this middle-class series would have to be somewhat limited in production capacity at the current Wolfsburg factory. As it turned out, this was a pivotal forecast by VW executives, since the VW Type III series never attained the popularity or sales success that the Beetle & Karmann Ghia enjoyed during their long production life.

VWs Director General, Heinz Nordhoff knew that a new vehicle project would be controversial news to the automotive world. He knew that absolute secrecy was the key to a successful program. Developing a new model line meant there would surely be questions raised about its replacement of the Beetle, rumors of VWs future direction, competitive spying issues, and possible morale problems with VWs vast number of workers. But design and development resources would be needed, suitable manufacturing space would be required, and so secrecy would be essential to maintaining the status of VWs leadership in the automotive world. The VW 1500 development program was one of the best kept automotive secrets of the decade, and when VW announced their new model line in early 1961, the trade journals and automotive industry experts were astounded and surprised by the complete secrecy of the program.

The issue of a suitable design and manufacturing area was solved when one of the large engine plant buildings at Wolfsburg suffered a devastating fire. During renovations, the windows were sealed and access was strictly limited. When the work had been completed to the building, Nordhoff ordered that the windows remain covered, and that access continue to be limited, leading to the perfect environment for the development of the new series cars.