The company owes its postwar existence largely to one man, British Army officer Major Ivan Hirst REME. In April 1945, KdF-Stadt and its heavily bombed factory were captured by the Americans, and subsequently handed over to the British, within whose occupation zone the town and factory fell. The factory was placed under the control of Oldham born Hirst. At first, the plan was to use it for military vehicle maintenance. Since it had been used for military production, and had been in Hirst's words a "political animal" rather than a commercial enterprise, the equipment was in time intended to be salvaged as war reparations.
Hirst painted one of the factory's cars green and demonstrated it to British Army headquarters. Short of light transport, in September 1945 the British Army was persuaded to place a vital order for 20,000. The first few hundred cars went to personnel from the occupying forces, and to the German Post Office. Some UK service personnel were allowed to take their Beetles back to the UK when they were demobilized, and one of the very first Beetles brought back in that way (UK registration index JLT 420) is still owned by Peter Colborne-Baber, the son of the original proprietor of the UK's first official VW Importer, Colborne Carages of Ripley in Surrey.
By 1946 the factory was producing 1,000 cars a month, a remarkable feat considering it was still in disrepair: the damaged roof and windows meant rain stopped production and steel to make the cars had to be bartered for new vehicles. The car and its town changed their Second World War era names to Volkswagen and Wolfsburg respectively, and production was increasing. It was still unclear what was to become of the factory. It was offered to representatives from the British, American and French motor industries. Famously, all rejected it. After an inspection of the plant, Sir William Rootes, head of the British Rootes Group, told Hirst the project would fail within two years, and that the car "is quite unattractive to the average motorcar buyer, is too ugly and too noisy ... If you think you're going to build cars in this place, you're a bloody fool, young man."
In a bizarre twist of fate, Volkswagen would manufacture a locally built version of Rootes' Hillman Avenger in Argentina in the 1980s, long after Rootes went bust at the hands of Chrysler in 1978the Beetle outliving the Avenger by over 30 years. Ford representatives were equally critical: the car was "not worth a damn." Henry Ford II, the son of Edsel Ford, did reportedly look at the possibility of taking over the VW factory but dismissed the idea as soon as he looked up Wolfsburg on the map and found it to be too close for comfort to the East German border. In France, Citroën started the 2CV on a similar marketing concept. In Italy, it was the Fiat 500 "Topolino".
Volkswagens were first exhibited and sold in the United States in 1949, but only sold two units in America that first year. On its entry to the U.S. market, the VW was briefly sold as a "Victory Wagon". Volkswagen of America was formed in April 1955 to standardize sales and service in the U.S.
Production of the Type 1 Volkswagen Beetle increased dramatically over the years, the total reaching one million in 1955. Sales soared due in part to the famous advertising campaigns by New York advertising agency Doyle, Dane Bernbach. Led by art director Helmut Krone and copywriters Julian Koenig and Bob Levinson, Volkswagen ads became as popular as the car, using crisp layouts and witty copy to lure the younger, sophisticated consumers with whom the car became associated. Despite the fact it was almost universally known as the Beetle (or the Bug), it was never officially labeled as such by the manufacturer, instead referred to as the Type 1.
The first reference to the name Beetle occurred in U.S. advertising in 1968, but not until 1998 and the Golf based New Beetle would the name be adopted by Wolfsburg. During the 1960s and early 1970s, although the car was becoming outdated, American exports, innovative advertising and a growing reputation for reliability helped production figures to surpass the levels of the previous record holder, the Ford Model T. By 1973, total production was over 16 million.Source: Wikipedia.