Rifles stomp every inf unit at the beginning 1v1. Conscripts vs Volks is an even match. Once Volks hit vet 1 they have a small advantage.
Keep in mind that Volks should get an AI upgrade if they lose their shrecks.
You can't give them MP40s / StGs because they lack the animation for it.
LMGs, Flamethrowers and changing their Kar98 stats is possible.
I'd say give them Gren Kar98s for 60MU and a Flamethrower upgrade (only one upgrade is possible on one squad).
Grens 2.0? All mainline inf units have the same abilities to some extent. Allies are designed to be effective at close-mid range, Axis units are more mid-long range squads.
Volks would be cheaper than Grens with better vet bonuses and better support while doing the same DMG when upgraded.
How in anyway does it make sense for Volks to throw out their Kar98's to pick up Kar98's? And why limit the upgrade to only 1 volk squad per game?
Just give them the animations for reloading and firing an StG44 and give them 3 for 90 munitions, also: they don't surpass conscripts until vet 3, and were talking vet 0 cons btw. It takes until vet 4 for them to surpass cons in totality, which is pretty insane considering they only cost 5 manpower less.