In the United States, the Volkswagen Beetle was a study in contrasts: mainstream and counterculture, a cult symbol with mass-market appeal, a little bug that grew to embody the attitude of a generation.

That sense of duality lives today in this bustling colonial-era city, which is the only place where the classic Beetle is still made--for sale only in Mexico. It's also the exclusive production site for the more sleek, more sophisticated New Beetle, most of which are for U.S. export.

Imagine the popularity of the original Beetle in its heyday in America, multiply that by 10, and it would perhaps approach the popularity and importance of the Beetle in Mexico--more specifically in Puebla, a vibrant city of graceful churches and magnificent tile facades 60 miles southeast of the capital.

About 1.1 million old-style Beetles are on the road in Mexico--more than one in every eight passenger cars--and about 100 more are produced every day at the Puebla plant, a sprawling 740-acre facility with 16,000 workers. The factory also assembles about 270 New Beetles a day, and along with other VW models, churns out more than 1,000 cars every 24 hours.

U.S. tourists are typically flabbergasted on their first visit to Mexico City by the number of Beetles zipping along the roads. They are everywhere--35,000 alone in the taxi fleet. Cabbies modified the cars by removing the front passenger seat to make more room for fares. It's not unusual to see four or five teenagers crammed behind the driver.

"Everyone likes the Bug taxis," said Francisco Hernandez, who has driven one for nine years. "People have become accustomed to the Bug way of life."

In a country with a history of low wages, high inflation and unexpected currency devaluations, it's easy to see why. Today, a new "Vocho"--the classic car's nickname here--costs about $6,700. Gas mileage is good, parts are inexpensive and easy to find, repairs often can be made by the owner, and it stands up to Mexico's rugged rural roads. By contrast, Mexico City dealers sell the snazzy New Beetle for about $20,000, including air conditioning.

"It's the people's car," Tomas Martin, another Mexico City cab driver, said of the classic Beetle. "It's cheap, and it fits everywhere," crucial in a city with 3.5 million vehicles all seemingly jockeying for the same parking spaces.

Mexicans jazz up their Beetles, too, adding blinking lights, racing-style steering wheels and shift knobs, mag wheels, trumpet-shaped tail pipes, fancy foot pedals, and stereo systems with enough volume to fill a concert hall. To decide which modifications suit their personalities, owners can browse through the latest edition of "Vochomania," a slick monthly magazine complete with a sexy little Beetle-of-the-Month centerfold.

The first VWs in Mexico were imported from Germany in 1954, but the brand did not take off here until the Puebla plant opened in 1967. Within a year, the Beetle was the top selling car in the country.

Since then, the plant has grown to the size of a small city, stimulating numerous other businesses and fueling the transformation of Puebla from a sleepy provincial town to a booming manufacturing center. Next to the plant is a huge industrial park, where 23 automotive supply companies and their 4,000 workers produce parts for Volkswagen and other car companies in Mexico.

"Three-quarters of the life in Puebla is sustained by VW-Mexico," said company spokesman Michael Wijers. "If we cough, Puebla is on its back." Local officials say that the plant and its supporting industries account for perhaps 40 percent of the city's commercial output.

Today, much of that is due to exports, a dramaticturnaround from just six years ago, Wijers said, when about 80 percent of the plant's production was for sale in Mexico. Then, after implementation of the North American Free Trade Agreement in 1994 and the sharp devaluation of the peso in 1995, company officials shifted their emphasis to exporting.

Foreign sales accelerated when VW designated the Puebla plant as the first to build the New Beetle, a choice dictated by the plant's high productivity, quality control, low labor costs--the typical worker makes about $14 a day--and proximity to the U.S. market.

Last year, 87 percent of the 340,000 vehicles made here were exported, and 80 percent of those were sent 450 miles north to the United States. Company officials credit the surge in exports to a burst of VW nostalgia in the United States created by the New Beetle, which hit showrooms there in May 1998.

But few people here can afford the new model, and those who can want bigger, four-door cars for the price. So Mexicans cling to their beloved Vocho and pray that it doesn't get sent to the auto graveyard, as has happened in other countries.

"I got this new for about $3,500 in 1992, and in two years it paid for itself," cabbie Hernandez said of his Beetle, adding that he drives the car every day from 6 in the morning till 7 at night and restarts the engine no more than three times. "This car was born to suffer."