VW's New Bug: Cute But...

By RON STODGHILL II/DETROIT

It's the kind of car that might inspire another Cheech and Chong road trip. From its groovy arched roof and fenders to a funky blue speedometer, the new Beetle--introduced last week at the North American International Auto Show in Detroit--is a motorized monument to Flower Power nostalgia. All that's missing is a Day-Glo paint job and a roach clip in the ashtray. But the Beetle will be a much trickier resurrection than bell-bottoms now that boomers seem partial to cars and trucks big enough to fit a Bug in the back.

With a starting price of $15,200, the new Beetle can't boast that it's the cheapest of its class, a huge part of the original's appeal. German automaker Volkswagen was careful to add an array of modern amenities such as an adjustable steering column, a six-speaker stereo system, an air filter for the cabin, and air bags front and side. Still, such similarly equipped subcompacts as the Honda Civic, GM Saturn, Ford Escort, Chevrolet Prism and Toyota Corolla are all cheaper and better-established models.

Practicality aside, that li'l Bug sure is cute. And VW plans to show that if it tugs the heartstrings, it will pluck the purse strings too. With such slogans as "More power and less flower" and "If you sold your soul in the 1980s, here's your chance to buy it back," VW hopes that blending baby-boomer nostalgia with Generation X sophistication will help sell as many as 50,000 Beetles in the next year. "This car is for people who see the world's glass as half full," gushes Jens Neumann, VW managing director for North America. "There is a delightful, approachable familiarity about this car. When people sit in the car, they feel good, at ease."

If that's the case, VW execs might want to take a spin. Over the past decade, the company's North American unit has been hammered. Although last year VW of America increased sales 1.2%, to 137,885 cars, that's only a third of the metal VW of America moved in its mid-1960s heyday. The idea of reviving the Bug came after VW buffs went wild over a Beetle built for display at the Detroit auto show four years ago. The company did some market research and decided it might be able to win Americans back by rolling out a contemporary version (the engine is in front this time).

Yet on American roads these days the fixation is on brawn and horsepower: trucks now outsell cars, and minivans and sport-utility vehicles lug the family around. (By the way, where's the New Age VW Microbus?) VW tried to cover itself by putting its tiny new number on steroids, offering the front-wheel-drive Beetle with a V-6 engine producing 150 h.p.--more than double the horses of the original. That may help some. But General Motors chairman John F. Smith declares, "Little cars don't sell here anymore. They're gone. The small car in America has disappeared. They're hard to give away."

Washington wants smaller--or at least cleaner. At the Detroit show this year, the Big Three did their save-the-earth bit by displaying some "clean" concept cars. Chrysler unveiled its ESX2, which combines lightweight construction, plastic body panels and a hybrid power train (a small diesel engine, batteries and electric motor) to get 70 m.p.g. Ford displayed a concept vehicle fabricated out of aluminum, titanium and carbon fiber that gets up to 63 m.p.g. and weighs 40% less than a Taurus. Ford promised to adapt its Windstar minivan, classified as a truck, to meet lower emissions by 1999. But while the Big Three talk about adding a salad bar to the auto buffet, they are busily cooking up the industry equivalent of pork sandwiches. "Look, we can make a car that runs on rubber bands and squirrels on treadmills," sighs Chrysler vice chairman Robert Lutz, "but that's not what people want."

The Big Three won't U-turn away from big anytime soon. Last year sales of SUVs were up 32.4%, and truck sales of all types rose 4.5%. Passenger-car sales, in contrast, dropped 2.7%, according to Autodata Corp. of Woodcliff Lake, N.J. In that kind of market, the new Beetle is already living up to its far-out image.

--With reporting by Joseph R. Szczesny/Detroit

With reporting by Joseph R. Szczesny/Detroit