In rallies, Group A became the main category starting from 1987. Volkswagen decided to produce a competition version of the Golf with all-wheel drive, equipped with an engine capable of rivaling the best cars on the lot. This engine was, moreover, in gestation given that work was being done on the G60 compressor within the company. The new Golf was developed throughout 1989 and the necessary 5,000 road-going specimens were produced for homologation. The engine was the 1.8 from the Golf GTI with compressor and displacement lowered from 1781 to 1763cc due to regulation issues. The car, called Golf GTI Rallye, could count on 160hp in the road version. The gearbox was a 5-speed manual. If the GTI Rallye Gr.A did not have much luck, the road version struggling to stir up the interest of buyers, more attracted by the GTI 16v and the normal GTI G60.