Volkswagen's American division announced on Thursday it will cease to make the third generation bulbous bug from July next year after two special editions are offered for sale.

The compact Beetle was first introduced in Germany in 1938 during the Nazi era and came to the US 11 years later, where it became a symbol of utilitarian transportation often used by hippies.

The iconic car sold for about 30 years before US sales stopped in 1979.

The last of the original bugs was produced in Puebla, Mexico, in 2003.

In 1998, Volkswagen revived it in the US as a more modern "New Beetle", attracting mainly female buyers. The company revamped it for the 2012 model year in an effort to make it appeal to men, giving it a flatter roof, less bulbous shape, a bigger boot and a navigation system.

US sales rose five-fold to nearly 29,000 in the first year, but tailed off after that. Last year VW sold only 8,627, according to Autodata Corp.

The special editions, which come in coupe and convertible body styles, get unique beige and blue colours in addition to the normal hues. They also get standard extra chrome, new wheels and three-colour ambient lighting inside.

Volkswagen has no immediate plans to revive the Beetle again, but the company wouldn't rule it out.

"I would say 'never say never,"' VW of America CEO Hinrich Woebcken said in a statement on Thursday.

The company plans to roll out an electric version of the old Bus in 2022 called the ID Buzz.

Australian Associated Press