Top end models featured more chrome, more brite trim, and full carpeting, and, starting in mid-1968, were available with a fully automatic transmission.

The Type 3 was competing in the market with the Chevrolet Corvair that had been previously introduced in the United States in 1960, which incorporated a 6-cylinder rear-mounted air-cooled engine in notchback and station wagon body style, as well as a compact van and pickup derived from the platform.

A unique feature of all four Type 3 models was that configuration of the flat 4 engine gave the cars both front and rear luggage volumes; a fact highlighted in VW's advertising.

Type 3 models received a facelift in 1970, with a revised front end, its nose extended by 115 mm (4.5 in) adding 1.5 cu ft (42 L) to the luggage capacity.

[9] At the same time Type 3s received revised square-section bumpers (with integral rubber strips in some markets), as well as larger tail lamps and front indicators.

The Basic Compact trim level featured reduced content, including limited color and upholstery availability; deletion of exterior belt line chrome trim, clock, and electric-heated rear window defogger—and using painted vent widow frames, a black cardboard front trunk liner over the gas tank without a liner on the sides of the trunk or over the firewall, and plain vinyl door panels without door pockets and rubber mats in lieu of interior carpet.

The Wolfsburg production facilities were then retooled to build the Golf, known as the Rabbit in the US., which eventually replaced the Type 1 as Volkswagen's best-selling sedan.

Production of the Type 3 moved to VW's new Emden plant, which was retooled later in 1973 to build the first-generation Passat (also marketed as the "Dasher").

[citation needed] While the long block remained the same as the Type 1, the engine cooling was redesigned by putting the fan on the end of the crankshaft instead of on the generator.

In August 1963 VW introduced twin-carburetor versions, these were, respectively the Volkswagen 1500 'N' (Normal), rated at 45 PS (33 kW; 44 hp), and the 1500 'S' (Super), 54 PS (40 kW; 53 hp) which had high-compression (8.5:1) domed 83 mm pistons and twin downdraught 32 mm Solex PDSIT carburetors for more power.

The Bosch D-Jetronic system was offered on the Volkswagen 1600 TE & LE version (E designating "Einspritzung" or "injection" in German).

The Type 3 offered both front and rear enclosed luggage areas, with cargo accessible via both the boot (trunk) and the bonnet (hood).

In each of the four body styles (Notchback, Squareback, Fastback, and Ghia) the engine is located under and accessed by a panel on the floor of the rear cargo area.

The original Type 3 with 5-bolt wheels (5 × 205 mm PCD) used twin leading shoe drum brakes at the front.

All Australian-assembled panel vans were fitted with a metal ID tag behind the spare wheel with a prefix of PV, followed by the number, stamped by hand.

Following the cessation of all local manufacturing by Volkswagen Australasia in 1968, the Type 3 was assembled from CKD kits by Motor Producers Limited at the same Clayton facility through to 1973.

The three-box Type 3 was launched in Brazil in 1968, it was heavily based on Volkswagen's EA 97 prototype of 1960 with some restyling penned by Márcio Piancastelli and four doors.

It met with little success, nicknamed Zé do Caixão (meaning "Coffin Joe", after a popular Brazilian horror movie maker) for its boxy shape.

[17] A "Volkswagen 1500" unrelated to the Type 3 model 1500 was sold during the 1980s in Argentina based upon the Dodge 1500 manufactured in that country.