The big news for the 1954 Volkswagen Beetle was a new engine, which was bumped up to 1.2 liters (1192 cubic centimeters) and a whopping 32 hp (up from 25 hp for previous models). Like in all Beetles, the air-cooled engine was mounted in the rear, so that its weight provided traction to the rear wheels. Also new for 1954, a dashboard-located push-button starter was replaced by an ignition switch and key.

According to the manufacturer's literature for the '54 Beetle, the vehicle was offered as both a Standard Sedan and a De Luxe Sedan. Design elements of the standard model included a built-in heater and vent wings in the front windows that pivoted to allow drivers and passengers to control fresh air ventilation.

Both models were designed for "tireless long-distance driving," with "finger-tip steering" and a "fast little engine" that got 32 miles per gallon, according to the automaker. The De Luxe Sedan added chrome plating, "richer" upholstery, and hydraulic brakes. The literature also noted that by the early 1950s, the VW Beetle was being sold in "100 different countries scattered all over the world."