Will VW Kill The Beetle?

Chicago--March 17, 2015--One hot topic at the Midwest Automotive Media Association's luncheon: Will VW will kill the Bug? Industry insiders believe that VW might axe its iconic Beetle when the current version runs its course. Nonetheless, VW says it's showing two new Beetle editions at the upcoming New York Auto Show. Here's the buzz:

BERLIN -- Volkswagen Group has identified cost cuts for its core passenger-car brand, CEO Martin Winterkorn said March 12. At VW's annual press conference, he intimated the part of the savings could come from not to replacing the three-door Polo, when the next-generation model comes out. This move is a response to falling market demand for two-side-door subcompact hatchbacks. VW is "intensively checking" whether it will only build a five-door Polo in the future, Winterkorn claims..

He said the effects of discontinuing models such as the three-door Polo and others that lack strong customer demand are "significant."

"They amount to triple-digit millions through lower ramp up costs and cutting down the number of components," Winterkorn said.

By not replacing the three-door Polo, VW would match what rival Renault has already done.

Ceasing unprofitable models and reducing expensive vehicle equipment may improve results by "well over 1 billion" euros this year, Winterkorn said.

Last July, VW announced a cost-cutting moves intended to improve the VW brand's bottom line. Audi, another VW Group brand, is more profitable.

The automaker says the savings program, which should be completed by 2017, should ensure that the VW brand achieves its target of an operating profit margin of at least 6 percent.

Last year the brand managed a 2.5 percent margin, down from 2.9 percent in 2013.

Eight months ago VW's top management issued the cost-cutting plans.