For 1961, all Volkswagen models including Karmann Ghias received a fully synchromesh gearbox as the crash first gear was discontinued. A new Solex carburetor was fitted with an automatic electric choke and the gas tank was flattened to create more storage space in the nose of the car. Worm and roller steering replaced the worm and peg design.

Meanwhile the 1,192 cc engine was uprated to 36 bhp with the compression ratio raised from 6.6:1 to 7:1. The crankcase was made stronger and cylinders moved apart for improved cooling.

Production dropped slightly to 16,708 Coupes and 3965 Convertibles. The Coupe cost $2,430 and the Convertible $2,695. From August 1961, colors and interior options were now shared between the two models and would remain so for the next 13 years of production.

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, Light Green or Silver).