One problem related to axle assembly has been reported for the 1998 Volkswagen Beetle. The most recently reported issues are listed below.
Failure 1-power steering pump broke down, no power steering fluid in reservoir. Failure 2-while driving off of a highway exit vehicle lost acceleration and coasted to a stop in traffic. It was found that the bolts came off the axel. Also, the driveshaft needed to be removed and fixed. The left driveshaft flange was also replaced.