Volkswagen Launches Convertible Beetles Next Week

MEXICO CITY February 24, 2003; Dow Jones reported that German car maker Volkswagen AG said Thursday it will begin distributing its new Beetle Cabrio, which is manufactured in Mexico, next week.

The convertible, an adaptation of the New Beetle that Volkswagen launched with much fanfare five years ago, went on sale in the U.S. in December, and will be launched in Mexico in March.

Volkswagen expects to manufacture 60,000 Beetle Cabrios this year for sale in over 80 countries.

The New Beetle, its convertible cousin, the original "bug" and the Bora/Jetta models are all exclusively manufactured at Volkswagen's Puebla plant in central Mexico.

With the launch of the Beetle Cabrio, production at the Puebla plant is expected to rise to 350,000 units this year from 332,000 in 2002.

The convertible New Beetle will be available in both automatic and manual drive, and in nine different color tones.

Europe's largest car maker is hoping that the Beetle Cabrio, which retails above $20,000, will help re-energize the Beetle brand even as consumers embrace new compacts like the BMW Group's Mini Cooper.

Volkswagen has sold around 600,000 New Beetles worldwide since the model's introduction, although Beetle sales sagged last year in the U.S.

"The convertible New Beetle is a vital piece in Volkswagen's comeback. If Volkswagen hadn't done it, it would have been like a birthday cake with no icing," said David Kiley, author of "Getting The Bugs Out: The Rise, Fall and Comeback of Volkswagen in America."

Aging models, cutthroat price competition and weak economic factors hurt overall Volkswagen sales last year in the U.S., where the company sold about 338,000 vehicles compared with more than 355,000 in 2001.

In a preliminary earnings report, Volkswagen said its total 2002 sales fell 1.8% to EUR86.9 billion from EUR88.5 billion as the company delivered 4.98 million vehicles to customers in 2002, down from 5.1 million in 2001.

Net profit tumbled 11% to EUR2.6 billion from EUR2.9 billion a year earlier. The company will provide a full earnings report and an outlook for this year on March 11.