I would follow your logic if the english pronunciation of the word Volkswagen was actually phonetically consistent. But while "Volks" is pronounced in an english way, isn't the word "wagen" pronounced in a weird German way?

"Wagen" on its own would probably be pronounced like way-gen, if my english intuition is not fooling me. Instead it is pronounced like wuh-gen.

I don't really care about this either way but if you are bothered by something the weird mixture is.. a bit annoying.

It's not just a word, it's a name. Names have a single correct pronunciation, they're not supposed to be translated.