Volkswagen is set to revive the beetle and make it a new-generation rear-engined economy car.

It was reported that the new entry-level, tiny four-seat Volkswagen is the brainchild of Ferdinand Piech, chairman of the Volkswagen board and grandson of original Beetle creator Ferdinand Porsche. According to other reports, The new Volkswagen vehicle will have its engine mounted on top of the transaxle, driving the rear wheels, but a water-cooled radiator up front, shifting from the classic Beetle theme.

The engines of the new car are said to be a TSI (turbo/supercharged) three-cylinder petrol unit and an ultra-economical diesel. A two-cylinder petrol engine has also been suggested for developing markets.

There were also reports that three different wheelbase lengths will be offered for the Beetle. One type will include a 130″ model that will go to the US. There will also be and two body-styles. One a retro hatchback and the other a conventional saloon. This new car is designed as a rival for the Renault Logan, Fiat Palio/Albea and other economy cars sold in poorer nations.

The US-market retro hatch is predicted to cost at $10,000 to $14,000. It will also be available to Europe to compete with the Fiat 500, new-generation Ford Ka, Peugeot 107/Citroen C1 and suchlike. It was also reported that power steering will not be included, since the car will be small and light enough for this not to be necessary. It will be incorporated with all necessary modern safety features such as ABS, stability control, airbags and so on.

There’s no word yet on a name for this car but some reports have suggested it will be called Lupa.

In a Volkswagen case, a former member of the German parliament and labor leader of the car company, Hans-Juergen Uhl, was fined 39,200 euros (52,130 dollars) by a German court yesterday after he admitted to having been involved in a bribery and corruption scandal at Europe’s leading car maker.

The municipal court of Wolfsburg sentenced Uhl, 55, to the fine after finding him guilty of aiding and abetting a breach of fiduciary duty and lying under oath.

Uhl, a work council chief at Volkswagen between 1990 and 2006, admitted accepting visits from prostitutes paid for with company cash and lying about it earlier in the case.

“I regret what I did and take responsibility for it,” said Uhl, who recently laid down his parliamentary mandate and quit the Social Democrat party (SPD) because of his involvement in the scandal.

In view of his confession, the court, which had originally planned five days for the trial, declined to interview any witnesses and handed down the sentence after just one day.

Earlier, Uhl had told the court that he had “lost grip on reality” and that, in retrospect, he was “aghast” at his own behavior.

In January, Volkswagen’s former head of human resources Peter Hartz was given a two-year suspended jail sentence and a fine of 560,000 euros for his role in a bribery scandal involving lavish holidays and prostitutes.

Hartz, the architect of extensive German labor market reforms and the former head of personnel at Europe’s biggest car maker, avoided prison under an agreement struck with the prosecution under which he gave full testimony and admitted paying bribes.

Drivethedeal.com, an online car broker, names Volkswagen Golf as the most popular car bought.

The Peugeot 207 is also very popular as it followed Volkswagen Golf in the list. So is the Audi A3, while cars like the Mazda MX-5 and Ford Focus have always featured in its annual top 10. Newer family cars such as the Ford S-MAX and Volkswagen Touran have become more recent favorites.

“We have always sold the Volkswagen Golf in large quantities, while more recently the Golf Match has proven very popular. The car is bought both as a first car and second car and offers practicality with German build quality and a good resale value,” explained Richard Sanders, managing director of Drivethedeal.com.

The average price of cars bought through Drivethedeal.com has risen from £15,000 in 2002 to £17,000 in 2006/07.

“Consumers are just as happy to buy a car online as they are with a lower value item such as a TV. A new car is the same no matter which UK main dealer supplies it, and our job is to find the dealer keenest to pick up extra business. We also speak to all our customers about things like delivery times and specification, so despite ordering online they still get to speak to a person,” said Sanders.

Volkswagen AG, Europe’s largest car maker, will reduce discounts and warranty claims, and concentrate on the sales of the most profitable models to make up for their loss in North America.

“We have a better financial result this year than last year, categorically,” said Adrian Hallmark, Volkswagen of America’s executive vice president. “We’ve cut costs, we’ve reduced incentives and we have hedged.”

Volkswagen sales have fallen in the U.S. this year as the company prepares new models for 2008. The company only sold 91,743 vehicles in the U.S. in the first five months, a 4.4 percent drop from a year earlier. Sales in 2007 will be flat, Hallmark reiterated.

Hallmark has a long-term goal of increasing U.S. sales to 400,000 to 600,000 vehicles a year. Last year, the car maker sold 235,140 cars and SUVs in the world’s largest market. Volkswagen’s U.S. sales record, set in 1970, was 569,696 cars and vans.

Volkswagen expects to increase U.S. sales next year with the introduction of a compact sport-utility vehicle, a new Passat coupe and a minivan built with DaimlerChrysler AG. The car company will also reintroduce a diesel Jetta in 2008. Volkswagen this year pulled the diesel, which accounted for 30 percent of U.S. Jetta sales last year, to switch to new technology.

Volkswagen’s North American loss in 2006 was 607 million euros, after a loss of 317 million euros in the first half. The company will no longer give profit figures by region when it reports first-half earnings on July 27.

Worldwide, the company reported a first-quarter profit after cutting labor costs. The Volkswagen brand had earnings before interest and tax of 386 million euros compared with an operating loss of 49 million euros a year earlier.

Volkswagen has lowered North American costs by decreasing spending on warranty claims by two-thirds over the last two years and focusing on sales of more profitable vehicles, Hallmark said.

“The car maker will double Rabbit sales this year to 20,000 vehicles while reducing Passat sales. The incentive costs for selling 2,600 Passats in the U.S. are eight times as high as selling the same number of Rabbits,” Hallmark said.
Hallmark plans to shorten delivery times from European and Mexican factories by one week by the end of the year. It now takes six weeks to get vehicles from Mexico and 14 weeks from Germany. Hallmark also said that it would cost $35 to $40 per week in transit for a Passat.

Hallmark, 44, replaced Executive Vice President Len Hunt as head of Volkswagen’s U.S. operations in late 2005. Volkswagen made changes in North America after sales plummeted and losses deepened. Hallmark had been running sales and marketing for the Bentley luxury-car division.

“Hallmark was moved from Bentley, where he was very successful, and has had one clear mission: Get Volkswagen’s U.S. operations into shape,” said Stephen Pope, head of equity research at Cantor Fitzgerald in London, who has a `buy’ rating on the stock. “The benefits of the hard work are being seen and when the new models come through it will auger well for the sales.”

The 2007 Volkswagen Jetta, which will be available in fall, will have a lower price than last year’s version. It wil start at $17,120, including a $630 destination charge. The 2006 Jetta started at $18,530, including destination.

Volkswagen spokesman Tom Wegehaupt said, “We lowered the price to be more competitive in the segment”.

The new Jetta also gets an optional iPod adapter, simplified cruise control, an optional premium sound system and a standard tire-pressure monitoring system.

The German automaker dropped the diesel Jetta and the 1.9 TDI diesel New Beetle for 2007. Wegehaupt said all-new common-rail diesel technology will be forthcoming on the New Beetle for the year 2008. He said the new 2.0-liter diesel engine is estimated to deliver 140 horsepower and more than 200 pound-feet of torque.

Volkswagen also announced a special model of the New Beetle is planned for 2007. It will be a white-on-white model that will go on sale in spring 2007. It will feature a white interior and exterior and a white trunk lid, although the top will be black.

After their initial meeting in New York ended positively, PROTON Holdings Bhd and Germany’s Volkswagen AG are due to hold new talks according to Prime Minister Datuk Seri Abdullah Ahmad Badawi..

The two car makers could probably meet in Bangkok regarding a long-term strategic partnership, he said yesterday.

The government have been looking for another alliance for Proton since 2004. The Malaysian car company recently posted its maiden annual loss in 15 years will be needing the new parter to come up with new models and to increase their sales.

“The fact that they want to have another discussion means both sides were happy with the first results. Both sides are in positive mood. I don’t have the details yet. I need the details before I can say anything. Otherwise there will be further speculation and this will not be good,” said the Prime Minister after launching the 2007 National Imams Conference in Universiti Kebangsaan Malaysia in Bangi, Selangor.

On May 31, Proton reported its first-ever annual loss for fiscal 2007 since its listing in 1992. On the same day, Abdullah said Proton should talk to other firms since Volkswagen was not interested in a proposal from Proton. His comment had jolted the parties into action, which resulted to a meeting in New York last week.

On June 1, Second Finance Minister Tan Sri Nor Mohamed Yakcop said the Government will decide on who will be the partner for Proton in the next three months.

Earlier this month, reports from a local paper came out that Volkswagen is set to buy 51 percent stake in a newly formed unit that will own Proton’s manufacturing, research and development and engineering divisions. After Edge Financial Daily reported this matter, Proton stock supposedly rose as much as 21 percent. The same news report also said that Sime Darby will buy a 43 percent stake in Proton Holdings from a Malaysian state investment company, Khazanah Nasional Bhd.

The Malaysian Government is still open to foreign car makers like Germany’s Volkswagen and US-based General Motors.

Nor Mohamed said that all the parties involved must “move fast” to resolve the problem at Proton, a 43 percent unit of Khazanah Nasional Bhd.

Once the car industry’s market leader, Proton’s market share has dwindled due to stiffer competition at home. Analysts have said that it needs a foreign partner to improve sales locally and abroad.

Khazanah managing director Datuk Azman Mokhtar said that talks with Volkswagen are still ongoing. Apart from Volkswagen, General Motors is also interested to partner Proton. “We want resolution soon. The team is working and meetings will be set for this month with the interested parties. For the local parties, the door is open to them. Khazanah is willing and able to sell some equities (in Proton),” he said at a media briefing in Kuala Lumpur.

The Government had earlier missed a March 31 deadline to find a suitable partner for Proton.

Shares of Proton closed 2.4 per cent, or 15 sen lower, at RM6.10 yesterday.

Volkswagen Group Award 2007 was given to Autoliv Inc., a worldwide leader in automotive safety. Volkswagen’s CEO, Professor Dr. Martin Winterkorn presented the award to Autoliv and to 25 other suppliers that have “played a decisive role in research & development, product quality, logistics, environment or entrepreneurial performance”.

“Our thanks go to all representatives of the award winner suppliers, but in particular to all the associates in their plants that have made outstanding efforts,” said Professor Winterkorn at the award ceremony.

Autoliv received its award in recognition of entrepreneurial performance in product innovation, cost optimization and process improvement.

“We are honored and delighted to be recognized for our contributions to Volkswagen,” said Franz Xaver Weiss, Vice President and responsible for Autoliv’s global Volkswagen business. “This achievement is possible because of the hard work and dedication of all members of our Volkswagen team, as well as Autoliv’s other 42,000 associates globally who consistently strive to keep Autoliv in the worldwide leading position in automotive safety.”

Autoliv has partnered with the Volkswagen Group (Audi, Seat, Skoda, Bentley and Lamborghini) for more than 15 years, providing airbag and seatbelt products across a variety of platforms. “This award recognizes our commitment to supporting Volkswagen as a partner in quality, cost and development. I’m sure there will be new challenges also in the years to come, but I’m convinced that we will be able to manage them with success,” said Weiss

Autoliv has received a record number of 14 awards from customers for its achievements during 2006. In addition to this award from Volkswagen, the Company has received one award each from Honda and Hyundai-Kia, two awards from General Motors, four awards from Ford and five awards from Toyota.

Volkswagen executive board member, Horst Neumann said yesterday that the German automaker plans to take further steps in improving productivity.

The company wants to increase car sales and plans to do more development and production itself rather than outsourcing activities to suppliers. Neumann said that Volkswagen plans to produce 27 vehicles per employee in 2007, up from 24 the previous year.

“A closer connection between development, purchasing and production is a major target,” said Neumann in a staff meeting at the company’s headquarters in Wolfsburg.

Neumann admitted that the utilization of the company’s plants has made a big step forward but there are still some challenges.

As part of a wide-ranging cost-cutting program, another 10,000 employees will go into early retirement by 2012, Neumann said. He also said that Volkswagen “urgently needs to find a connecting arrangement” for the time after the current early retirement program. The “international competitive pressure, especially for industrial workers, will remain extremely high,” Neumann noted.

According to earlier company statements, Volkswagen will cut 5,000 jobs between 2007 and 2009 as part of its overall restructuring effort, which includes cutting a total of 20,000 jobs. The job cuts will be done through early retirement and won’t require any layoffs.

In March, Neumann had said the program to cut 20,000 jobs could be completed in 2012 or 2013, adding that he doesn’t see any need for further cutbacks at the moment.

A labor deal signed in November 2004 rules out compulsory layoffs until the end of 2011.

Volkswagen’s headcount reduction follows similar moves by Western automakers such as General Motors Corp., Ford Motor Co. and DaimlerChrysler AG. These car companies have announced plans to cut thousands of jobs to reduce costs and regain competitiveness despite high raw-material prices and the growing challenge from Asian rivals.

Volkswagen Canada announced yesterday that the prestigious Canadian television show, Motoring 2007 has awarded the Volkswagen Rabbit the title of the best “Family car (Under $30,000)”. This award is just one of the many awards given to the 2007 Volkswagen Rabbit from various Canadian groups, publications, and media outlets.

“We are thrilled and honored by the success that the new Rabbit has encountered from the Canadian consumers and media alike,” said John White, Executive Vice-President of Volkswagen Canada.

Volkswagen Rabbit had constant media attention ever since its June 2006 launched. It is available in either three or five-door body styles and is powered by a 2.5 liter 5 cylinder that develops 150 hp and 170 lb/ft of torque. It can be mated with a standard five-speed manual or an optional six-speed automatic with Tiptronic. Pricing starting at $19,990 for the three-door model.

Produced by Bradford Productions ltd, Motoring 2007 has been part of the Canadian television landscape for 20 years now, hosted and produced by Brad Diamond.

Volkswagen Canada, Inc. is founded in 1952, and has a headquarters in Ajax, Ontario. It is a subsidiary of Volkswagen AG of Germany. Volkswagen is one of the world’s largest producers of passenger cars and Europe’s largest automaker. Other Volkswagen models available in Canada include the City Golf, City Jetta, Rabbit, GTI, New Beetle, Jetta, Passat, Eos and Touareg.

Volkswagen and Audi have selected Vincentric as their lifecycle cost provider. In a license agreement, it stated that both Volkswagen of America and Audi of America Corporate Sales departments will have access to the Vincentric data for use in areas such as client presentations, RFP responses, and industry advertising.

Lifecycle Costs or Cost of Ownership show the cost to own and operate a vehicle over time, and include depreciation, state fees & taxes, fuel costs, insurance, financing costs, maintenance, repairs, and opportunity cost. Gaining access to Vicentric data will mean that the two automotive companies will be able to show clients how their products can cost less to own and operate than competitive vehicles.

Vincentric announced yesterday about the agreement. They will provide Volkswagen of America access to Vinbase Online for Fleets, which is the Vincentric database of lifecycle cost information for over 2,000 vehicle configurations per model year. Vincentric’s Vinbase Online for Fleets is updated monthly with the latest vehicle pricing, fleet incentives, residual values, and fuel prices to measure current lifecycle costs.

According to Craig Cheatle, Corporate Sales Manager for Audi of America, said that they are thrilled how they can independently compiled Vincentric data to support the strong lifecycle cost results of the Audi vehicles. “We especially like the ability to customize the variables such as cap cost, fuel prices, and finance rates so the measurement matches the driving patterns of our customers. This lets them see how they can provide their drivers with luxury Audi vehicles that easily fit their budget,” said Cheatle.

Volkswagen is likewise glad with the agreement mentioning that it is a great solution for the company, according to Kristopher Arthur, Corporate Sales Manager for Volkswagen of America. “Our customers much prefer seeing lifecycle cost comparisons that haven’t been compiled by our internal staff, and with the strong Volkswagen results, this works well for us.”

Vincentric provides data and insight to the automotive industry by identifying and applying the many aspects of automotive value. They use their comprehensive, proprietary cost-of-ownership database, Vinbase, to measure and analyze the overall cost of owning and operating vehicles and its impact on the value provided to buyers. Vincentric also provide data to Yahoo! Autos, Cars.com, Kiplinger’s Personal Finance, Business Fleet Magazine and Fleet-Central.com as a means of providing automotive insight to their clientele. Vincentric, LLC, is a privately held automotive data compilation and analysis firm. Their headquarters is in Bloomfield Hills, Michigan.

Convertibles and folding metal roof coupe-cabriolets are the latest trend right now in the UK, with the recent statistics from the Society of Motoring Manufacturers and Traders indicating that registrations are now over 100,000 units a year, three times the number a decade ago.

Industry figures also show that petrol engined models dominate with a 70 percent of sales, but Volkswagen beg to differ.

Volkswagen introduced their Eos Coupe-Cabriolet range last July with petrol and diesel engine options. The petrol models currently account for 51 percent of Eos sales but next year Volkswagen UK expects that the diesel variants will be on top by accumulating 54 percent of sales. This is definitely far from the 20 percent Eos diesel sales forecast Volkswagen had last July when the range was initially launched.

This year, Volkswagen is expecting to sell 5,500 Eos models in the UK. The UK is the third largest market for Eos in world after Germany and the USA.

Most of the coupe-cabriolet sales in the UK comes from the business user-chooser customers. The folding metal roof technology apparently makes them feel safer and more secure so companies now allow these types of vehicles on their car choice lists.

High mileage company car users affect the increasing sales of diesel powered models, hence Volkswagen predicts that next year their diesel Eos models will beat other petrol versions.

Currently, the single best selling Eos model is the 2.0-liter TDI.

There are two new Volkswagen convertibles that are will set new trends in droptop technologies, the Beetle and the Eos.

The Beetle convertible inherited the same Beetle external feature, only thing is that it comes with a soft top that folds back like that of a baby buggy. According to some, it has the distinctive look of Beetle convertibles, which was called Cabriolets or Cabrios before. Statistics say that nearly 70 percent of owners are women.

The Eos is on the other hand, was named after the mythical Greek goddess of dawn. And as the source of its name, this convertible comes with cutting-edge technology. Its metal roof is not only retractable but also has an integrated sunroof. According to Volkswagen, the design of the Eos is muscular. They also aim to market it to 40 something college graduate.

There are numerous differences between the two vehicles, like their speed.

The Eos can run up to 60 mph in 6.5 seconds thanks to a 3.2L V-6 of 250 horsepower. The Eos also comes with a 2L turbocharged four that takes around a second longer to 60 mph.

The Beetle on the other hand is not as fast but can very well compete with other cars. Because of its 2.5L inline five-cylinder engine of 150 horsepower it can catch up with the Eos in 10.4 seconds.

The Eos’ V-6 gets 22 mpg in the city or 29 on the highway. The Beetle ragtop with its five-cylinder power plant comes in almost the same 22/30. The difference is that the Eos is bigger.

They differ in the price too. The Beetle soft top starts at $22,120. On the other hand, Eos with the four-banger starts at $27,990 and with the six starts at $36,850. Meanwhile, the Eos V-6 is a bit higher at $40,930.

When the snug hardtop is down on Eos, there’s a rollover protection system that elevates mini-rollbars in accidents. The Beetle also has automatic rollover supports. For its safety features, both cars have anti-lock brakes and vehicle stability control systems.

The Beetle’s windshield is thrust away from the driver but its severe rake produces a wide expanse of upper dashboard. It’s not unlike being in a convertible minivan. With the top down, the view to the rear is restricted.

Base on a road test, the steering of the Beetle is quick but curves are taken without almost no road feel. While the Eos can go around curves with glue-like adhesion with little body roll. The steering is also quick and accurate with agile handling. The 12-way heated seats helps soak up the bumps and makes for fine cross-country driving. One disadvantage though is that it does not have a lot of cargo capacity to offer motorists.