Car and Driver on the VW 1500 gray market

How did so many VW Type 3s find their way to the United States before the VW 1600s were officially introduced to the American market in the fall of 1965? Conventional wisdom says that the cars were brought over individually from Germany by servicemen and tourists, or brought over the border from Canada, where the 1500s were available from their introduction in 1961. While there's no doubt that many 1500s found their way here through those channels, there was also a more formalized gray market supplying 1500s to the U.S. market in the early '60s. There were companies that acted as semi-official importers, supplying dealers with nearly new "used" Type 3s outfitted with sealed-beam headlights, MPH speedometers, etc. This allowed even authorized VW dealers to sell Type 3s years before they were officially imported (as seen here and here). VWoA tolerated the gray market, though when speaking on the record they were against it.

This great article from the April 1964 issue of Car and Driver on VW's reasons for not bringing the VW 1500 to the American market explains how these gray market importers brought VW 1500s into the U.S., including how they set up special "Americanizing" factories in Germany just to prepare 1500s for export. The article posits that VW didn't interfere with the gray market because it was actually a profitable way to sell more cars here indirectly without upsetting the official balance of trade between Germany and the U.S. If VW had increased its export volume by expanding its range of models in the U.S. it could potentially have lead to trade sanctions—after all, a trade dispute between Germany and the U.S. just a few years earlier resulted in the U.S. government slapping a retaliatory $257 tariff on all German trucks, including VWs. The gray market was actually a win/win/win for VW, the gray market importers, and American consumers.









Walter Henry Nelson's Small Wonder and the February 1964 issue of Mechanix Illustrated magazine are other good sources for information on the VW gray and black markets that were thriving in the early 1960s.