Curbside Classic: 1983 Volkswagen Rabbit GTI — When Fun Hopped Across The Ocean

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(first posted 11/9/2015)    Few cars symbolize their respective decades the way hot hatches symbolize the 1980s. The cars merged the economy car boom of the early part of the decade with the late-1980s performance renaissance – and Volkswagen’s GTI started the hot hatch trend with this car.  But the GTI not only spawned a new market segment, it also signaled a major shift in Volkswagen’s own sales strategy.  In all, this was one amazingly transformational car.

Our featured car is a 1983 model, the first year that the GTI was offered in North America. On its surface, the car resembles a standard Rabbit, with a few cosmetic enhancements.  But the beauty of this car lies underneath, and its combination of lively power, agile handling and a reasonable price caused buyers to overlook the fact that it looked like a dated economy car.  When it was clear that such a combination could sell well in the US, a new market niche was created.  However, Volkswagen’s decision to offer its GTI in the North American market was made mostly out of desperation with otherwise sinking sales, in an attempt to generate some showroom buzz.

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Volkswagen, of course, earned its reputation as a purveyor of inexpensive, durable cars with the Beetle. When the Beetle was replaced in the 1970s, VW executives had every reason to believe that its replacement would carry the torch for many years to come – and the company’s business model was built upon offering high-volume, cheap cars.  For a while, it seemed as if the Beetle’s replacement would fulfill that expectation, but by the early 1980s, something clearly had gone wrong.

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The Rabbit (Golf outside North America) was introduced to much fanfare in 1975 as Volkswagen’s high-volume economy car. But while its Beetle predecessor was able to carry on for decades with minimal upgrades, times had changed – namely because of a new factor: Japanese competition.  The Japanese were able to build economy cars cheaper than German Volkswagen, and their short product cycles kept new cars and features pouring into dealerships.  VW sales nosedived, and by 1980, for consumers, the Honda Civic was their new Beetle, not the Rabbit.  Volkswagen was being pummeled: in 1970 VW held 6.7% of the US car market, but by 1982, that was down to around 2%.

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For a while, it looked as if the diesel engine would be the Rabbit’s savior, as diesels became suddenly popular during the second energy crisis. In 1980 and 1981, most US Rabbit sales were diesels.  However, the diesel market suddenly collapsed, and that left VW in a very tight spot.  The Rabbit was its volume leader, but at 8 years old it was getting tired – and was priced higher than the Japanese competition.  Something had to be done quickly to pump some interest into Volkswagen’s US model lineup.  Fortunately, that answer was already being sold in Europe: a high-performance Rabbit.

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Shortly after the Rabbit/Golf was introduced, European markets received a high performance GTI model, featuring a more powerful fuel injected engine (110 hp from 1588cc), a sport suspension, upgraded interior and blacked-out trim. While the GTI found an immediate following in Europe, VW of America did not bring a similar model to US shores.

Volkswagen proffered several reasons why it didn’t bring the GTI to North America – among them: difficulties with EPA certification and worries that a de-smogged GTI wouldn’t be a genuine performance car. But the most likely reason is that VW didn’t believe it needed to.  The company had the Rabbit-based Scirocco for a performance car, and was otherwise content with its existing Rabbit lineup – as long as they were selling.  But eventually, Volkswagen needed to inject some interest in its Rabbits, and the GTI was drafted to do the job.

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When the GTI did debut in the US for 1983, it had several significant enhancements from the base Rabbit. Foremost was the 1.8-liter 90-hp fuel injected engine that featured redesigned cylinder heads and a higher compression ratio.  In addition to the engine (bored out and 22% more powerful than the standard Rabbit’s), GTIs received a close-ratio 5-speed transmission, a free-flow exhaust, and a suspension featuring recalibrated struts, stiffer springs, and front and rear stabilizer bars.  Clearly, this was a serious effort at a performance car.

The GTI could reach 60 mph in about 10 seconds – not noteworthy today, but impressive by 1983 standards, and the fastest Volkswagen made until that time. However, the car’s most compelling performance attribute was its handling.  The unboosted steering provided exceptional feel, and the suspension components produced a rare combination of high capabilities and reasonable comfort.  GTIs were literally cars that could be raced on the weekend, and then driven to work in perfect comfort the next day.

Everything meshed together in this car’s performance attributes, and its driving experience could be summed up in one word: Fun.  After a decade of steadily vanishing fun, fun was back in cars, thanks to the GTI.

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Visually, the car was still 90% Rabbit, but details suggested it was something more. A front air dam, fender flares, and 60-series tires on snowflake-pattern alloy wheels (from the Quantum) gave the car a more aggressive stance.  Black-painted bumpers and trim, and subtle red GTI badges (the grille-mounted badge is missing on our featured car) completed the package. 1983 GTIs were available only in white, red, silver or black.

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Inside, some GTIs received eye-poppingly vivid red (called cordovan in VW literature) upholstery, while others had a more subdued midnight blue interior. Less noticeable features included a newly designed steering wheel, full instrumentation, and a unique dimpled shift knob.

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Our featured car is in very good condition. With the exception of an aftermarket pop-up sunroof, the car’s exterior is virtually unmodified from what it looked like when it was new.

On the interior, this car appears to have been re-upholstered, in matching red, though not in the original striped pattern (likely because the seating surfaces tended to wear quickly and the original fabric is now very difficult to find). Otherwise, only the addition of a newer stereo indicates the passage of time inside this car; it’s a very well-kempt survivor.

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Volkswagen hit the sweet spot with the GTI. It was an immediate hit with buyers, and the company sold an estimated 15,000 to 20,000 US copies in 1983.  Car enthusiasts had been suffering for most of the 1970s and early 1980s with a dearth of genuine performance cars, and when the GTI hit the scene it was almost a dream come true.

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While at $8,000 to $9,000, it could hardly be considered cheap, a GTI was affordable enough to be an excellent buy for the high level of performance it offered.  And although it was obviously a Rabbit, buyers didn’t seem to care; it was the performance, handling and Teutonic feel that drove customers to VW dealers’ door.

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And that was Volkswagen’s epiphany.  By 1983, the company realized that with high production costs (both in Germany and in VW’s ill-fated Pennsylvania plant where this car was produced), and unfavorable exchange rates, it could no longer hope to challenge the Japanese for high-volume cheap cars.  But what VW could offer was German engineering and a European feel and design.

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Buyers had a favorable impression of German design and engineering, and that was something the Japanese couldn’t match.  The GTI proved quickly that where Volkswagen could succeed was with niche vehicles.

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For several years after the GTI’s US introduction, Volkswagen ads frequently stressed the firm’s German heritage and engineering (the above ad is one of the first of this type, full of sarcastic references to German seriousness).  Volkswagen found the ultimate niche in its own heritage – stressing its cars’ country of origin and the positive engineering attributes that went with it.

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With its niche carved out by the GTI, Volkswagen charted its course through the rest of the decade, marketing itself as a mini-Mercedes or a Teutonic Toyota.

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The GTI’s influence, though, didn’t stop with its own company. The concept of a high-performance hatchback was essentially new, and since the GTI was successful, the concept became irresistible to other carmakers.  True, there were some similar concepts in the US before the GTI, but they were mostly graphics-and-fancy-trim packages, not genuine performance cars.  The GTI changed all that.

What’s remarkable is that this car changed its own company’s strategy, it pioneered a new market segment, and it was only made for 2 years. The Rabbit itself was replaced by the 2nd generation Golf in 1985.  The GTI, however, proved its worth and a GTI package transitioned to the new Golf platform.

Within a few years, many other hot hatches hit the US market. These cars merged fun, practicality and affordability – a combination that was highly successful in the late 1980s.  Some models were better than others, but the segment became a major force in the affordable-sports market – and all of those cars owed their existence to the GTI’s initial success.

Ultimately, the hot hatch market was a flash in the pan; by the mid 1990s, its core of youthful budget-oriented buyers moved on to other vehicles. But one of the few survivors of this class was the GTI itself.  Still made today and in its 7th generation, the new GTI is bigger and more powerful than the original, but remains one of the sole connections to the original hot hatch concept.  The GTI virtually created a whole class of cars – and then outlived most of its eventual competitors.

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Volkswagen intended for its 1983 GTI to fill a “bridge year” in its marketing strategy –maintaining customers’ interest until it would finally have redesigned cars for 1985. However, the car’s immediate success made it much more than a bridge; the GTI forged Volkswagen’s path forward.

The GTI served almost as a flagship for VW in North America – helping convince customers that Volkswagens were sophisticated enough to warrant additional cost over their Japanese competitors. It fulfilled this role perfectly.

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Due to its influence both on its own manufacturer and on the US market in general, the Rabbit GTI was one of the most influential cars of the 1980s. The GTI was a fantastically well executed response to a marketplace dilemma; without it, VW would likely have had a dreadful decade in North America, and consumers may have missed out on the hot hatch phenomenon.  Considering that the standard Rabbit was 8 years old and barely competitive by 1983, that’s quite an achievement.