New ‘Beetle’ May Be Built for Americas : Autos: Volkswagen may launch an updated version of the popular Bug to be sold in the Western Hemisphere.

A new generation Volkswagen Beetle is moving closer to a return to the U.S. market, where it could re-establish the auto maker’s reputation for building cheap, spunky transportation, analysts said Friday.

Volkswagen’s supervisory board met Friday and may have approved the program, which calls for the all-new front wheel-drive vehicle to be built in Mexico for sale in the United States, Canada, Mexico and possibly elsewhere in Latin America.

Volkswagen did not issue a statement about the car following the conclusion of the meeting. VW officials in the United States were not available for comment.

The Wall Street Journal reported Friday that board approval of the car was expected at the meeting.

In the United Sates, the new Beetle is expected to sell for $12,000 to $13,000 and compete in the heart of the subcompact market with cars such as Chrysler Corp.’s Neon, Ford Motor Co.’s Escort and Honda Motor Co. Ltd.’s Civic.

Based on VW’s Concept 1 car displayed at major auto shows last year, the new Beetle will cram new technology such as dual air bags into the classic bug shape remembered fondly by millions of drivers.

Unlike yesterday’s air-cooled engine mounted over the rear-drive wheels, the new Bug will have a water-cooled engine mounted in front.

The target market will be children of Baby Boomers who drove the original Beetle in the 1960s and ‘70s.

“We were expecting approval of the program,” said Chris Cedergren, an analyst with AutoPacific Group, a California-based automotive consulting firm. “Total annual production for this car could go to 300,000 units a year, and it’s earmarked more for the Americas as opposed to the European market.”

VW still builds the current generation Beetle, first introduced in the late 1930s, in Mexico and Brazil. But safety and emissions regulations forced VW to withdraw it from the U.S. market in 1974.

Cedergren said VW wants to sell about 75,000 to 100,000 new generation Beetles in the United States. The total could eclipse VW’s total U.S. sales, which came to 84,468 vehicles for the first 10 months of 1994.

While VW’s sales this year have improved dramatically because of the long-awaited introduction of the new Golf and Jetta models, they are still way below the company’s late 1960s’ U.S. heyday, when sales exceeded 200,000 vehicles a year.