We're going to avoid the low-hanging fruit here and just say up front that no, old Beetles did not pipe hot exhaust gas straight into their cabins. They relied on exhaust gases to heat up (relatively) fresh air, which was then routed into the cabin to warm people up, a method even used in a slew of Beetles that got lost in the Antarctic.
Air is pulled into the engine compartment by a fan, which then lets the air flow over the hot engine components to cool them down. In Beetles built before 1963, the air that had been warmed by the motor was then routed into the cabin to warm the passengers. After 1963, VW added heat exchangers to get the air even hotter. The heat exchanger is like a pipe within a pipe; air used to cool the engine flows through the inner pipe, while hot exhaust gas flows through the outer pipe. The exhaust heat is then transferred to the inner pipe through cast-metal fins on the latter. Finally, the heated air is channeled to the car's interior to help keep folks comfy.
Now, there was still a chance for exhaust fumes and other nasty stuff to get through to the car's interior, but that's because the so-called fresh air first passed over the engine itself to help keep it cool. If there were any oil or exhaust leaking from the engine, it could be picked up by the air that eventually got heated by the exhaust gas for the cabin.
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One of the main issues associated with an air-cooled Bug is that, even when brand-new, the heating system simply didn't provide enough hot air for U.S. drivers. However, that can be easily solved, as the problem is usually located in the driver's seat, not in the Beetle's HVAC system. According to some advice buried deep within the Volkswagen owner's manuals, "The car will warm up quicker if you open a vent window so that the blower can force the warm air more easily into the otherwise well-sealed interior." In other words, unless you cracked open a window, it was physically difficult to force more hot air into the cabin because there was nowhere for the cold air that was already there to go. Readers of a certain age may recall the ocean-going VW Beetle that could float because its cabin was so tight.
The heat exchanger can be another source of difficulties for today's drivers. The original OEM inner pipe had numerous metal fins on it to help get more heat from the exhaust gas into the cabin air. More recent aftermarket replacements, however, often save money by having fewer fins, which allow less heat to be exchanged. It can also be easy for the system's various clips, hoses, and ducts to be damaged after decades of use. The same holds true for the control cables that let the hot air into (or keep it out of) the cabin.
All of the 21.5 million classic Volkswagen Beetles, which were on sale until 2003 (in Mexico), relied on air-cooling. One weird but expected Beetle prototype was developed with a water-cooled engine in 1984 for the Mexican market, but it never entered production.
On the other hand, the New Beetle (1998-2010) and its successor, the Beetle A5 (2012-2019), featured modern water-cooled engines that utilize heater cores instead of heat exchangers to warm the cabin. Here, a coolant liquid is piped through the engine to absorb heat. The liquid then flows into and warms the heater core, and fresh air blows through the core, heating up as it enters the car's interior.
Now front-engined, the 1998 New Beetle premiered with a choice of two water-cooled engines: a 2.0-liter, four-cylinder gas engine with 115 horsepower and 122 pound-feet of torque, and a 1.9-liter four-cylinder turbodiesel producing 90 horsepower/149 pound-feet of torque. A turbocharged four-cylinder gas unit debuted in 1999 with 150 horsepower, which was later boosted to 180 horsepower for 2002. For 2006, a 2.5-liter five-cylinder mill arrived, setting the precedent for the return of five-cylinder fun for the VW Golf R's 25th anniversary.
It also carried over to the final generation of the Beetle –– at least for now. The Beetle family's power finally peaked when the limited-edition 2014 GSR launched with 210 horsepower from a 2.0-liter turbo four.
