The guitar is made by First Act, an interesting company who got rich selling children's guitars in Wal-Mart. They're very marketing savvy - with a large custom shop churning out one-offs for bands like the Yeah Yeah Yeahs and Franz Ferdinand. The firm was founded by one Bernard Chiu, who made a fortune selling air humidifiers in the '90s.
The VW GarageMaster guitar looks ok, if you can excuse the clunky-looking VW logo control knobs. And the cheesy VW gang sign on the headstock. In a world of identical Fender/Gibson clones, it's nice to see a guitar that's part Hagstrom, part Rickenbacker, part Burns, with a scratchplate to match the colour of your car and a VW logo at the 12th fret.
The only real innovation in the VW guitar is a built in active analog amp modelling circuit, which I'm guessing works a little like a SansAmp pedal. It means you can plug the guitar straight into your VW car stereo and... well, I'm not exactly sure how you're supposed to play in your car, but that's the idea. Of course, if you like the guitar but don't want to buy the car, expect these things to be all over eBay in a few weeks, and cluttering up lofts for years to come.