In September 1968, the Wolfsburg automobile manufacturer continued to move away from its dependency on the Beetle. However, with its daily production of 4,200 units, it still remained the lifeblood of the company. In order to maintain its competitiveness, Volkswagen developed the VW 1302 featuring a new chassis and twice as much trunk space which went into standard production as a sedan and convertible in 1970. Not all efforts could, however, change the fact that the Type 1, which featured an air cooled rear engine, lost its attractiveness. A new generation of small and mid-sized vehicles with water-cooled engines, front-wheel drive, larger interior and trunk space, as well as new styling conquered the market. Sales of the Beetle dropped in 1970, but the losses were made up by the success of the South American subsidiary as well as by the recently merged Audi NSU Auto Union AG, whose models served an increasingly growing market segment.