Volkswagen had been a king of the hill for decades before Chevroletthought of using the name on a Corvette.

VW sold more than 560,000 cars in the U.S. in 1970. It looked invincible. Among imports, the terms king and VW were spoken in the same breath.

Then the Japanese dumped on the West German automaker with lower-pricedcars. Then VW dumped on itself by dropping the Beetle and bringing out theRabbit, with a superhigh price tag and a fuel-injection system some referred to as fuel rejection.

Despite its detractors, VW deserves credit for taking chances. The Rabbit may have failed, but keep in mind that VW was the first to set up assembly in the U.S., before the Japanese found it fashionable. The factory didn`t last,but VW has.

VW has fallen on its face a few times, but it always comes back. It cameback with Jetta, a model that represents a step up from the Golf, whichsucceeded the Rabbit.

The subcompact Jetta is built on a 97.3-inch wheelbase and is 171.7inches long.

We test-drove the `89 Jetta Carat, the top-of-the-line in the series.

VW has had so many problems it would be nice to say that Jetta represents the turnaround and the troubles are over.

Jetta is a nice car, but in our opinion Fox is the trend-setter at VW, alow-priced, nimble machine that makes no pretenses. With Fox, what you see is what you get. It`s the Beetle philosophy revisited.

With Jetta, there are some contradictions that need to be resolved. Forexample, the 1.8-liter, 105-horsepower, fuel-injected 4-cylinder enginesprings to life-after reaching about 50 m.p.h. Performance, ride and handlingimprove as the speedometer passes 50.

Life after 50 is fine for Liz Taylor; for the Jetta, we`d like to seesome of the exhilaration sooner.

Why not more low-end power? When you look at the EPA ratings, you findthe answer. Jetta is EPA-rated at 25 miles per gallon city/34 highway with 5- speed manual, and 23/28 with automatic.

Jetta weighs in at 2,300 pounds but feels heavier at lower speeds. Youfeel that heaviness in the wheel in low-speed maneuvering.

Jetta styling is boxy at a time when rounded edges are in vogue. Wideprotective bodyside moldings and rubber rocker panel and wheel well moldingsare decorative and guard against rust. They`d look and act just as well onmore stylish sheet metal. Jetta will be redone in about two years.

Inside, the cloth seats are rich looking and comfortable, but overallcomfort would improve dramatically if Jetta was about two inches wider.Considering that trunk room is equal to if not greater than that of some full-size cars, a couple more inches of width would not be too much to ask.

The four-door Carat features power steering, windows, door locks andmirrors; cruise control; air conditioning; all-season steel-belted radialtires; and AM/FM with cassette as standard.

The only options are antilock brakes, manual su nroof and forged alloywheels. At $995, antilock brakes are a costly but highly recommended option.

The Jetta Carat starts at $15,140; with automatic, it`s $15,645.

To celebrate 40 years of doing business in the U.S., VW is marketingspecial Wolfsburg editions of the Jetta, Golf, Fox, Cabriolet and Vanagon inlimited numbers, with special decor, trim and equipment such as radios orpower steering added, depending on the model.

To take advantage of rising gas prices, VW said it will ship 6,000 Jettas to the U.S. equipped with a 1.6-liter, 4-cylinder diesel engine and 5-speedmanual only. If the venture is successful, a diesel-powered Golf will beadded. The Jetta diesel base price: $10,110.