Herbie rides no more: the Beetle finally reaches the end of the line

It has been a long time coming, but the Volkswagen Beetle is finally heading for extinction.

The bug-shaped vehicle began life as a "people's car" in Hitler's Germany, became a symbol of the Love Generation in the 1960s and faded into retirement as an affordable means of transport in the Third World. But today, the last old-style Beetle will roll off the production line in Puebla, Mexico - the last factory in the world where it is still made - bringing to a bitter-sweet end a remarkable 58 years of continuous production.

More than 21 million Beetles were turned out in that time, making it the most popular car in history. A new 1990s design, based on the Volkswagen Golf, is being sold in Europe and North America, but hundreds of thousands of the classic version are still on the roads in the Third World - in Mexico alone there are still 500,000.

In richer countries there remains a large army of Beetle fans, still restoring the cramped, noisy runabout with its flat windscreen and folding seats, and exchanging memories on the internet. For them it was always more than just a mode of transport; it was a cultural icon and a reminder of a headier, more carefree, less traffic-clogged past.

Commercial production at the Puebla plant ceased a couple of weeks ago. Since then, the factory has turned out 3,000 special-edition models in sky blue and beige, for sale to collectors at slightly more than the usual $7,500 (£4,600) price tag. The very last Beetle will be sent to Volkswagen's headquarters in Wolfsburg, Germany.

VW is wallowing in as much Beetle nostalgia as it can muster, issuing souvenir piggy banks, ashtrays and candles. It has also revived a toy version of Herbie, which starred in a series of Disney movies back in the 1960s and 1970s. In truth, the end of the Beetle has been expected for some time. In the United States, the car was phased out as long ago as 1977 because its air-cooled, unconventionally placed rear engine fell foul of new safety and environmental regulations and the company preferred to withdraw it from the market than redesign it back to front. It disappeared from the European market at much the same time.

Slowly it has vanished even in the poorer parts of the world. In Brazil, one of its most successful markets, it was phased out in 1996. It lived on in Mexico largely because it was the vehicle of choice for Mexico City's taxis. The green-and-white vochos became ubiquitous. But they were not without their problems. Aside from environmental concerns in one of the world's most polluted cities, they also developed a reputation as a kidnapping liability. It became too easy for kidnappers and street robbers to block off the two doors, making it impossible for passengers to escape. Mexico City's civic authorities recently decreed that from now on taxis must have four doors.

For a long time, the Beetle's survival in the Third World was because of a time warp that free trade agreements are now conspiring to tear away. In Mexico, the arrival of new, cheap models such as the Ford Fiesta, the Fiat Uno-sized Palio and a rush of models from Japan knocked down sales of the Beetle from about 50,000 in 2000 to 24,500 last year.

The hard economic realities made little impact on Beetle fans, for whom the car will forever be associated with such heroic moments as a daring escape into West Berlin in the 1960s - where an East German hid inside a modified bonnet - or the time when a Beetle fitted with a sail cruised across New York harbour.

The nostalgia is not entirely justified by the car's history, which has its roots in Nazi Germany. It was conceived by Adolf Hitler himself as a "people's car", cheap enough to endear the dictator to the German working classes. He commissioned Ferdinand Porsche to design it. "It is with bitter feelings that we see millions of honest, hard-working and capable men, whose opportunities in life are already limited, cut off from the use of a vehicle, which would be a source of yet-unknown happiness to them,'' Hitler said at the 1934 Berlin Motor Show.

The Beetle never got beyond the prototype stage before the outbreak of war, but a military version, the Kubelwagen, nevertheless went into production.

These first Beetles - including an amphibious version - were built with slave labour, something that remains an embarrassing blot on VW's historical record. As the war ended, those same labourers kept turning out Beetles to keep themselves from starvation. After 1945 the Beetle factory was offered to Ford, the British Rootes Group and Peugeot, who all rejected it. A British Army major, Ivan Hirst, helped secure the future of the car with an order of 20,000 for the Allied armed forces. A German executive with General Motors called Heinz Nordhoff was appointed to run Wolfsburg in 1947. He didn't like the Beetle much, but recognised its commercial value. For many years, it was the only car that VW produced.

At first, the Beetle became a symbol of the Wirtschaftswunder, the "miracle" that transformed West Germany's economy in the 1950s. Then, together with the Austin Mini and the Fiat 500, it helped spearhead the sexual revolution, thanks to its handiness for courting teenage couples. In the United States, it is still remembered as the "Love Bug".

Its heyday began to wane in the early 1970s, when VW produced the first of its highly successful Golfs. The 1973 oil crisis, economic recession and the environmental movement all played their part in pushing the Beetle towards its slow demise. Production in Germany ended in 1978, but not before the Beetle had spawned the VW camper van, the pretty Karmann coupé and, of course, the Porsche sports car.

Workers previously assigned to the old Beetle at Puebla will now switch to the new model, as well as other VW vehicles.