Volkswagen continued on a roll in 2004 with the Beetle by offering a new 1.9-liter turbodiesel engine that generated 100 hp (up from 90 hp the previous year). Not only did the turbodiesel (called the TDi) provide plenty of power when needed but it also got 46 mpg on the highway. It joined a lineup that included the 2.0-liter, 115-hp gas engine (delivered in the GL and GLS trim packages) and the 180-hp turbocharged 1.8T gas engine (in the Turbo S).

Other improvements included head curtain airbags, redesigned 16- and 17-inch wheels, and new exterior colors for the cabriolets, as well as a number of new options, such as OnStar service. Among the Beetle's standard features were power brakes, power heated mirrors, a lighted entry system, four-wheel anti-lock brakes, cruise control, air conditioning, power door locks, and an anti-theft alarm system.

For the most part, Beetle owners were passionate about their cars, despite its limited storage space in the trunk, limited legroom in the back seat, and comfort factor over long trips (though owners were happy with the car's comfort around town). Some noted problems with the sensors, which gave false alerts.