1958, short for Volkswagen, which is German for "people's car" (see folk (n.) + wagon).
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folk n.
Old English folc "common people, laity; men; people, nation, tribe; multitude; troop, army," from Proto-Germanic *fulka- (source also of Old Saxon folc, Old Frisian folk, Middle Dutch volc, Dutch volk, Old High German folc, German Volk "people"). Perhaps originally "host of warriors:" Compare Old Norse folk "people," also "army, detachment;" and Lithuanian pulkas "crowd," Old Church Slavonic pluku "division of an army" (hence Russian polk "regiment"), both believed to have been borrowed from Proto-Germanic. Old English folcstede could mean both "dwelling-place" and "battlefield." According to Watkins, from PIE *ple-go-, suffixed form of root *pele- (1) "to fill," which would make it cognate with Greek plethos "people, multitude," and Latin plebes, "the populace, the common people." Boutkan thinks both the Germanic and Balto-Slavic could be a common borrowing from a substrate language.
Superseded in most senses by people. Generally a collective noun in Middle English, however plural folks is attested from 15c. Old English folc was commonly used in forming compounds (59 are listed in the Clark Hall dictionary), such as folccwide "popular saying," folcgemot "town or district meeting;" folcwoh "deception of the public." Modern use of folk as an adjective is from c. 1850 (see folklore).
wagon n.
"four-wheeled vehicle to carry heavy loads," late 15c., from Middle Dutch wagen, waghen, from Proto-Germanic *wagna- (source also of Old English wægn, Modern English wain, Old Saxon and Old High German wagan, Old Norse vagn, Old Frisian wein, German Wagen), from PIE *wogh-no-, suffixed form of root *wegh- "to go, move, transport in a vehicle" (source also of Latin vehiculum). It is thus related to way.
In Dutch and German, it is the general word for "a wheel vehicle;" its use in English is a result of contact through Flemish immigration, Dutch trade, or the Continental wars. It has largely displaced the native cognate, wain. Spelling preference varied randomly between -g- and -gg- from mid-18c., until American English settled on the etymological wagon, while waggon remained common in Great Britain. Wagon-train is attested from 1810. Phrase on the wagon "abstaining from alcohol" is attested by 1904, originally on the water cart.