Did Studebaker Miss Out on the Volkswagen Beetle?
by Don Jones

I recently came across a book, More Than They Promised: The Studebaker Story, published by Stanford University Press and written by Thomas E. Bonsall who claims that the Studebaker company might have saved itself by adding the distribution of the Volkswagen Beetle to its roster of available car models.

Bonsall, for those who don't know, is one of America's most respected automobile historians. He is the author of The Lincoln Motorcar, and has won both national awards for automotive history writing, the Cugnot Award of the Society of Automobile Historians and also the McKean Cup of the Antique Automobile Club of America.

Bonsall won the Cugnot award with his book Pontiac: They Built Excitement (1991) and his book Advanti (1978, 1994) is the only comprehensive history of the Advanti and the Advanti II.

Just before World War II, Adolf Hitler was a car devotee and wished to have Germany produce a special car for his new road network. He wanted it to be inexpensive and simple to run and operate. Hitler contacted Ferdinand Porsche to help design and build the car. At the time, it is believed they were influenced by a car brand called the Tatra. Hitler and Porsche were thought to have used a misappropriated Tatra V570 for reference. Porsche met with the Tatra designer Hans Ledwinka on several occasions to finalize Hitler's conception; what would become the Volkswagen Beetle. (Bonsall notes that the car was at first called the "Kraft-durch-Freude Wagen," identified after the KdF, or Strength-through-Joy, a Nazi labor organization.")

Tatra V570a
Tatra V570a Car Photo

In 1936, Ledwinka's son Erich became the head engineer at Tatra. He quickly brought out the next upgrade called the T97 which was, more or less, a mock-up of the Volkswagen Beetle. The T97 predated the VW Beetle's rear-mounted, air-cooled, horizontally opposed four-cylinder engine, as well as the chain-driven single overhead cam arrangement. In addition, the T97 used an independent suspension and had hydraulic brakes on all four wheels.

Tatra T97
Tatra T97 Car Photo

In his book on the history of Studebaker, Bonsall relates that although the Volkswagen Beetle was ready for production in 1938, it would only be after the war that the numbers significantly increased.

In 1946, the Studebaker Corporation was headed by Harold Vance, Chairman, and Paul Hoffman, President. They were concerned that the company needed to develop its export market and were looking for opportunities in that effort. They acquired a plant in Hamilton, Ontario, to assemble cars for the Canadian market. They also took steps to work with some foreign distributors with the plan to manufacture Studebakers in several other countries.

After the war, Great Britain found itself responsible for the Volkswagen factory in Wolfsburg, Germany. As a "make work" project for the local labor force, the British put the factory into partial operation. It was not their intent, however, to become the manufacturer of Volkswagen Beetles. No, instead they offered the operation to nearly every car builder in Europe and America. Several companies such as Ford, Renault, and Humber all rejected the British intentions to sell the factory under favorable terms to the car builders or even as an outright gift. It appeared that the design of the car and the fact it was Hitler influenced just wasn't what car manufacturers were interested in so soon after the war.

Bonsall writes that at that point the head of the export operations for the Studebaker Corporation, Richard Hutchison:

"learned about the Beetle and apparently became quite entranced with it. He acquired an offer from Wolfsburg promising distribution and manufacturing rights for North America and took the proposal to Vance, who turned it down flat. Vance didn't even want to see the car, although one was reportedly shipped to South Bend for testing. Nothing more was ever heard of it."

Thus ended the first opportunity to gain a foot-hold on at least the North American Volkswagen market. Bonsall relates how following this rebuttal the British even offered the Volkswagen business to Russia suggesting a revised border plan could put it in East Germany. Russians were looting what they could in East Germany but the country did not want the Beetle business.

The British caved in and hired Heinz Nordhoff, who had been an executive at Opel, to operate the business. Nordhoff did not think much either of the Beetle but he had a family he had to support. Bonsall writes "and the rest, as they say, is history."

1951 Volkswagen Beetle
1951 Volkswagen Beetle Car Photo

The second time Studebaker could have had the distribution and manufacturing rights to the car and which would have helped the company tremendously involved a Maximillian Edwin Hoffman (no relation) who was buying up the distribution rights for most European cars he thought could be sold in America. A crackerjack salesman, Maxie Hoffman had gained the Volkswagen distribution rights in America but even he could not sell enough Beetles to make a profit so he gave up his distributorship.

Once again Richard Hutchison, who still headed Studebaker's export operations, had heard of Maxie Hoffman's predicament. Hutchinson had tried previously in 1946-47 to have Volkswagen taken over by Studebaker but Vance and Hoffman were not interested. But this was 1954. Bonsall states:

"This time, he met with Volkswagen officials, and returned to South Bend in triumph with a signed distribution contract - and Vance refused to accept it a second time! Vance simply could not understand the potential appeal. In his opinion, the Beetle was too bizarre, too this, too that, just too. And, so, he refused to sign off for the corporation."

It should be noted that Volkswagen Beetle sales in America went from a very small number of sales, 1139, in 1953 to 32,662 in 1955 and then, in 1960, went by the 100,000 mark. Bonsall states "How the fate of Studebaker would have changed with that one signature ..."

A couple years later, Studebaker tried to do a deal to import Volkswagens without paying duty but the deal was shaky and fell through. So ended Studebaker's involvement with Volkswagen.