The successor to the New Beetle will arrive in 2012 with more space in the back seat and better packaging, said Stefan Jacoby, president and CEO of Volkswagen Group of America.

Speaking at a press event in Germany, he also said the next generation of the Beetle will be "more of a halo car" for the Volkswagen brand. And Jacoby said he expects the next Beetle to achieve higher sales. The current model peaked at 83,434 U.S. sales in 1999 and has plunged considerably since then.

"There is a great opportunity with the Beetle and the emotional fabric it has to offer," he said.

More space inside and better packaging are essential, Jacoby said. He said the major complaint he hears about the current car -- aside from its age--concerns the cramped rear seat.

But the redesigned Beetle will not necessarily be bigger, Jacoby said.

Few changes have been made to the current Beetle since it debuted in 1998.

Walter de' Silva, head of design for the VW Group, said the design of the next Beetle "will be a big step."

VW sold 26,477 Beetles last year in the United States. Through September, sales fell 48 percent to 11,646.