Hitler recognized the value in getting the population mobile in a practical and affordable manner, as the Model T had in America at the beginning of the 20th Century.

During the 1920s, the German government began developing the autobahn, a system of controlled access motorways. In the 1930s, the Nazis greatly accelerated the construction of these highways from dozens of miles per year to hundreds or even thousands, as a means to expand the economy and get people to work in a time of economic depression. However, few vehicles were capable of utilizing their potential, certainly none that were attainable by the common person.

The idea was that the VW would be that car: capable of transporting a family for long distances at 100 kph and with good fuel economy, and affordable to the average family due to its low price and a government backed savings scheme that would allow for small payments over time.

The Volkswagon sold very well in Germany after WW2. The reason it didn't sell well immediately after its debut in '41 is because production was restricted by the war effort. The same thing happened to automakers the world over: there were tanks and trucks to be built, and metal and factories couldn't be spared just so Johnny or Felix could drive a shiny new car. In fact, every "new" car sold to civilians in America from 1943 until 1946 was manufactured before or in 1942, and the only people allowed to purchase from a limited supply of around 600,000 cars were those the government deemed critical to the public welfare or the war effort: doctors, critical war workers, police and fire departments, etc. Interestingly, travelling salesmen were considered critical to the economy and thus were placed in the same company.