Karmann Ghia Coupes and Convertibles received the same updates as the Beetle for 1963, which involved improved piston ring designs in the engine, a better carburetor pump and plastic safety caps on plug terminals. Heat exchangers were modified to improve the heating system and vent oil fumes. Headliners were a new perforated vinyl design which was easier to keep clean. The 1,192 cc engine generated 36 bhp with 7:1 compression.

Karmann Ghia production rose to 22,829 Coupes (double the sales in 1956) and 5433 Convertibles. Prices remained the same, with the Coupe costing $2295 and the Convertible $2495. Colors and interior options were now shared between the two models and remained so for the next 11 years of production.

A new palette of colors was introduced for 1963 with numerous interior options. Exterior colors were Black Pearl, White, Sea Blue, Pacific Blue, Ruby Red, Anthracite, Emerald Green, Polar Blue, Manila Yellow, and Terra Brown. Contrasting colors were often applied to Coupe roofs which could be black or white, or another exterior color to accent the principal color choice (Light Blue against Dark Blue, for example). Wheel colors tended to be either White or another color-keyed tone (Blue White, Pearl White or Yellow).