What type of material is on my Volkswagen 68?

On the red is paint which is about as thick as a fingernail.  That flesh colored stuff is Bondo(plastic bodyfiller) It is also grey and pink and white   I see the metal of the body and see metal rust.  This is the common way to fix steel cars for many body shops and most DIY. Do some research on Bondo working methods.  It is like spreading drywall on the wall.  Except you are spreading fiberglass resin putty on the surface and making it smooth.  Every body shop knows how to do it.  I just read the instructions on the can and did it that way.

. It is not bad. Probably hit a dog or curb,

. The other grey is the paint job?

Hope the entire thing isn't filled with Bondo like that bit......the fender should have been replaced when it was pranged because that's too thick for a lasting repair.

That's a botched filler job. It needs grinding out and redoing properly.