In the late 1950s, VW determined that they needed a somewhat larger sedan to compliment the Beetle and Karmann Ghia, and to compete with more upscale sedans that were emerging. A factory damaged by fire became the secret development home for the new model. VW left the exterior of the Wolfsburg factory alone and boarded up the windows to further the perception that it was no longer in use. Work began on development in 1959, and by 1960 test mules and prototypes were in use. During this time, VW steadfastly denied the existence of any new models, including a public denial at the 1960 Geneva Auto show.
The basic premise for the new model was the venerable air-cooled flat four engine. It was mounted in the chassis in such a way as to allow for some storage room above it in a rear compartment. It eventually came to be known as the pancake engine because of its' flat compact packaging. Since it was a body-on-frame design, VW saw the potential for a few different body styles. They finally announced the new line in 1961, and the initial VW 1500 as they were called, was the Notchback (see Notchback). This was a basic "3 box" design which was popular for sedans emerging from NSU and BMW among others. To my eye, the Notch is one of the best executed of the 3-box cars in terms of its proportions and layout. It has simple lines and little in the way of chrome trim. The interior was also simple, with a 3 guage binnacle, and typical spartan VW beyond that. It was well received, and a year later the Variant (aka Squareback) was launched as an even more spacious "Estate" version. In 1965 the final model in the 1500/1600 series was released. It was the Fastback version (see VW Fastback), and it featured a hatchback with more room than the sedan, but less than the vast Squareback. There was also a 1500 convertible based on the Notchback.
Ironically, the more "luxurious" Notchback was never officially imported to the US, and most of those here came via Canada. The Type 3 did come to the US in the form of the Quareback and the Fastback starting in 1965. This roughly coincided with the move to front disc brakes, 1600cc and twin carbs. The Type 3 went to 12V electrics in 1967. Full automatic versions became available in 1968, along with the introduction of fuel injection, which was a first for a mass-produced car in this segment of the market. 1970 saw facelifts for the Type 3 and production finally ended in 1973. By then, more than 2 million Type 3s had been sold making it another successful model for VW.