The solution arrived with Auto Union. They had attracted a small following with their technologically advanced Audi front wheel drive medium sedans. Volkswagen had acquired the Ingolstadt-based company in 1964 from Daimler-Benz. Audi's expertise in water-cooled engines and front-wheel drive would be essential in developing a new generation of Volkswagens. FWD offered better performance with lighter weight and more room in a smaller package. The Audi technology in the Golf would regain for Volkswagen the engineering lead over rear drive cars that Ferdinand Porsche had bestowed on the original Beetle over its large conventional peers. The small Golf had to succeed in replacing the high volume Volkswagen sedan. The upmarket Dasher/Passat would be VW's first front wheel drive car, and it was relatively well received for its lower volume market. The Golf would adopt an efficient "two-box" layout with a steep hatch rather than a formal trunk, which would be later added in the Jetta. The water-cooled engine would be mounted transversely in the front. Work on the Golf began in 1969, shortly after Kurt Lotz became head of Volkswagen.

The first Golf (VW internal designation Typ 17) began production in 1974, although it was marketed in Canada and the United States from 1975 to 1984 as the Volkswagen Rabbit and in Mexico as the Volkswagen Caribe. It was a water-cooled, front wheel drive design in a hatchback body style. It featured firmly sprung and damped independent Macpherson strut front suspension and semi-independent twist-beam rear suspension that gave crisp handling and good roadholding without being too uncomfortable. The Golf was Australian Wheels magazine's Car of the Year for 1975 and Irish Semperit Irish Car of the Year for 1978 and British What Car? magazine's Car of the Year for 1981. The name is short for Golf-Strom, German for Gulf Stream; it was named for that oceanic current to reflect its international character.

The Golf was designed by Italian automobile architect / designer Giorgetto Giugiaro of the ItalDesign design studio. Giugiaro had also designed the Alfa-Sud and the Lotus Esprit Mk1. The car changed little before being replaced (in Europe) by the Mark 2 version in 1984. However, air conditioning became available as an option on the domestic market in August 1975. The possibility to retrofit the installation, together with a larger battery, was offered to existing owners.

Contrary to popular myth, the Mk1 Golf GTI was not the first hot hatch by quite a margin. The Renault 5 Gordini comfortably predates the GTI, and is actually slightly faster than the Mk1 Golf GTI, managing 0-100 km/h in the same 9.6 seconds or so as the first 1600 GTI, but squeezing out a further 5 km/h over the Golf. Nevertheless, the Golf GTI was perhaps the first hot hatch with mass market appeal and many other manufacturers since have created special sports models of their regular volume-selling small hatchbacks. The idea behind this was rather straightforward - take a basic-transportation economy car and give it a high-performance package, making it practical and sporty. It was one of the first small cars to adopt mechanical fuel injection for its sports version which raised power output of the 1588 cc engine to 110 PS (81 kW/108 hp). In 2004, Sports Car International declared the Golf Mk1 GTI to be the 3rd best car of the 1980s.

There was a minor facelift in 1980 which saw the adoption of larger rear lamp clusters (more in line with Giugiaro's original concepts), revised bumpers, a new dashboard with a more modern-looking instrument display, and for US versions rectangular headlights.

From "Wikipaedia" - so it must be true