Volkswagen Karmann Ghia Coupe sales slipped in 1966 to 23,387 units, but the Convertible held steady at 5395 drop tops. The year before, the crankshaft from the 1500cc engine increased the engine’s capacity to 1285 cc (referred to as the 1300 motor) and increased performance to 40 bhp. Compression was raised from 7:1 to 7.3:1 a larger 30 PICT carburetor was installed, and top speed increased to 78 mph. The 1500 cc engine fitted to the Type 3 was also listed as optional, with 44 bhp. Hub caps changed from domed to flat style and wheels were vented to aid cooling.

Both 1966 Karmann Ghia models were fitted with dual circuit brakes, a break-away interior safety mirror, flat safety switches and a wood-grained dashboard. Major changes were on deck for 1967, including a new engine, dual-circuit brakes and 12-volt electrics.