Is it a Miata? Is it a Beetle? It’s our $2000 Challenge winner.

“I don’t think I had done an oil change when I started this build,” admits Derek Penner, builder of this unlikely mashup between a Volkswagen Beetle and a Mazda Miata. “I grew up in my grandpa’s cabinet shop across the street, so I knew how to build stuff, but I didn’t know how to weld.”

A wood craftsman by trade, Derek showcased his handiwork at the recent Grassroots Motorsports $2000 Challenge Presented by Tire Rack and Powered by AutoBidMaster. Total budget for each car entered in the event? Just $2000. The competition venue? Autocross, drag racing and concours judging. The event took place March 29-30 at Florida’s Gainesville Raceway.

The inspiration for this build, though, dates back more than a decade. While visiting Flyin’ Miata’s Colorado shop during a 2014 family vacation, Derek saw the Miata-based Exocet and Catfish cars in person.

“Now, I don’t like the way those look–like sharks jumping out of the water to me–but I knew I wanted the weight and the trackability of those cars,” he explains. “I also really like rat rods–I love patina–and nobody was doing a fat-tired car on all four corners back then. So, I wanted to mix those two ideas. I wanted to make a rat rod that could turn instead of just going straight.”

Derek already had a Miata and received a second one in 2015. Which one to build? Fate would answer that question for him. While driving one, he swerved to miss a deer and hit a fence. “So, we knew which car it would be,” he quips.

Now to find a body for the creation. “Next,” he explains, “I was trying to find some sheet metal or a body that had both doors, intact bodywork, patina and wasn’t missing anything.

“I couldn’t find anything in even the $500 range for some reason. Then, a green Beetle shell came up for 50 bucks–no floor pans, rear engine fire. The guy put it up as maybe yard art or scrap metal, and that was enough for me, so I got it.”

Why is Derek’s Bug red? He’ll explain that in a bit.

Photography by Chris Tropea

His first challenge, though: how to adapt a Beetle’s 95-inch wheelbase to the shorter Miata platform. Answer: He simply shortened the nose of the Beetle. And to join the Miata’s front and rear subframes–or what was left of them–he fabricated a tube frame of sorts.

“As I began actually cutting bodies apart and dismantling the Miata, I gave myself a year to get it on the road,” Derek explains. “I’m really good at starting projects and really bad at finishing them, but I got it on the road in six months. First drive was actually on my birthday.”

The car would only run on two cylinders: Someone had incorrectly set cam timing. “I couldn’t run the motor correctly until I found that,” Derek explains.

Next issue: junk in the fuel tank. “Somehow it filled up or descaled and had 2 cups of sand in it,” he continues. “I still can’t figure that out, but between those two things, I eventually got it right.”

Once he got it running well, he did what any sensible person would do: autocross it. And with that came the opportunity to upgrade the car’s powerplant.

“One of the local guys, who loves building motors–that’s what he does for a living, tuning motors–wanted to build a new motor to drive in his car,” Derek shares. “He said, ‘Come rip all my stuff out and give me 800 bucks.’ So, I got his wiring harness, ECU, throttle pedal, turbo manifold– basically just a full powerplant swap. That’s my big purchase. Everything else was pennies. That’s what made it fast.”

Photography by Chris Tropea

Then life happened. Derek’s world got busy, and the Miata-Beetle took the back seat.

“We had our second child in 2017, and business was growing,” Derek says. “I built two businesses, and basically, I didn’t autocross again until early 2024. When my cousin got back from college, he said, ‘Let’s go autocross,’ and I said yes.

Now to finish the project. The green Bug was pretty beat, but Derek found a better shell–the red one–on Facebook Marketplace for a hundred bucks. And the same person who sold Derek the drivetrain also had a better Miata subframe donor for $200. “That’s where the subframes and such were swapped over,” he explains.

And Derek’s woodworking skills? Check out the front and rear of the interior: Those wooden panels, crafted with his grandfather, recall those found on vintage mahogany boats.

Photography by Chris Tropea

Time, finally, to head from Texas to Florida for the Grassroots Motorsports $2000 Challenge Presented by Tire Rack and Powered by AutoBidMaster. Turns out the car was fast, too: His best autocross time put him first in class and third fastest overall. During the drag portion, the Beetle dropped a 13.379-second run in the quarter mile.

Sadly, though, the car’s last run was cut short, and the team’s night became a long one: About 200 feet into their last pass, the car began to wobble and, after a short slide, tapped the right retaining wall, knocking out a headlight and bending a control arm.

A wheel dolly helped the team move the car off track and behind the grandstands. Covered in sweat, dirt and grease, they pulled a control arm from another Miata and swapped it in. At around midnight, it was ready for the Sunday morning concours.

Photography by Dave Green (drag racing), David S. Wallens (repairing)

At the end of the weekend, Derek came home with half a dozen trophies. His top time in class at the autocross and second in the drag race combined to give him the event’s fastest dynamic time. He finished second in the concours.

His competitors seemed to like the creation, too, awarding him the Challengers’ Choice award. The final prize? The $2000 Challenge overall championship.

“I knew the car was fast and I knew we had a real shot in autocross, but I had no idea on the drag race,” Derek explains. “I didn’t know what to expect coming into the competition, and I just feel super blessed, overwhelmed and have no clue how we did what we did in hindsight.

“I was really impressed with everyone else’s builds–the quality of builds and the amount of ingenuity. It didn’t feel like I deserved any of these awards, and I think, honestly, winning overall first meant a lot, but winning Challengers’ Choice was almost a tie for me. It really means a lot.”

Derek Penner, second from left.

Photograph by Dave Green

Derek adds that this won’t be the last time you see his car at the Grassroots Motorsports $2000 Challenge Presented by Tire Rack and Powered by AutoBidMaster.

“My immediate plan, at least as far as the next steps on this car, is going over to cantilever rear suspension so that I can get the shock body and spring out of the way so I can stick 14-inch-wide race slicks underneath the back for autocross and drag,” he explains. Then he’d like to push back the engine–maybe 10 inches.

“Finally, it was built when I was 22, and I added a lot of extra weight, so I’d like to try to go down and get a fully wet car in the 1500-pound range. That would make me really happy.”

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