SMALL IS SWELL FOR VW BEETLE

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Beetlemania is sweeping the U.S. as Volkswagen of America's new Beetle bucks the trend of small cars' sliding sales.

Auto analysts credit the car's unique icon status and sporty styling.

"The Beetle is a more sporty car and more of a fashion statement," said Susan Jacobs, president of consultancy Jacobs & Associates. "Unlike other small cars purchased for very practical reasons by households that are very price sensitive, the Beetle is purchased more on impulse."

Ben Hulsey, a Houston VW dealer, has delivered all 20 Beetles he's received so far and has more than 100 orders outstanding. Most purchasers are baby boomers buying second cars.

"All VW dealers are more than sold out," he said, adding that the retro-looking Bug is attracting consumers who hadn't considered VW in 20 years.

VW plans to make 100,000 Beetles this model year -- half for the U.S. It expects annual production to reach 160,000 next year.

The marketer is spending $35 million on ads introducing the car, via Arnold Communications, Boston.

"VW doesn't even need to advertise the car . . . because you don't have to sell the image of Beetle," said James Hall, VP-industry analysis for AutoPacific. "It's a cultural icon."

Scott Corwin, a principal at consultancy A.T. Kearney Inc., said consumers are attracted to the Bug's distinctive styling: "The whole idea in building brands is to do something to differentiate yourself in a crowded marketplace." But he questions whether Beetlemania is just a fad.

Mr. Hulsey sees it as a blessing. While inside his closed dealership on a recent Sunday, "people had their noses pressed up to the glass to see the car," he said.

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