Volkswagen replaced the first-generation Polo with an all-new model in October of 1981. Called type 86c internally, the second-gen Polo was initially offered exclusively with a shooting brake-like silhouette that earned it nicknames such as Bread Van and Squareback.

The first-gen Polo was pioneered by NSU, given to Audi in an attempt to merge the two companies and later re-badged as a Volkswagen in a bid to take on small economy hatchbacks from France and Italy. The second-gen Polo’s development was much simpler because it was designed in-house by Volkswagen and positioned right where the firm wanted it to be from the very beginning.

The Bread Van Polo offered best-in-class cargo space but its boxy body generated a very mixed response among car buyers in Europe. Volkswagen quickly launched a second model with a more conventional, coupe-like body whose roofline was similar to that of the first-gen Polo. Called Hatchback and Coupé, respectively, the two body styles lived on side-by-side until the end of the mk2’s long production run.

Sales reached new heights over the course of the 1980s and the Polo became Volkswagen’s best-selling model in a number of markets across Europe. As a result, the Wolfsburg-based automaker experimented with many different variants including a highly fuel-efficient model equipped with a supercharged two-cylinder diesel engine. The drivetrain was tested extensively but it was never given the green light for production.

On the other end of the spectrum, the sporty Polo GT was introduced in 1985 with a 75-horsepower engine and Volkswagen pushed the enveloped further two years later with the potent Polo GT G40. The G40 was powered by a 1.3-liter four-cylinder engine that churned out 113 horsepower and 111 lb-ft. of torque thanks to a special supercharger that featured G-shaped compression channels. A similarly-designed supercharger was also used on the Passat, the Scirocco, the Golf Rallye and the Golf GTI G60.

Another interesting off-shoot of the mk2 Polo was the Formel E, an economy-focused model introduced in 1983. Building on the foundations laid by mk1 Formel E launched in 1981, the mk2 model initially used a high-compression 1.1-liter four-cylinder engine that sent 50 horsepower and 60 lb-ft. of torque to the front wheels via a 3 + E gearbox, a four-speed unit with an extra-long fourth gear designed to improve gas mileage at high speeds. Visually, the Formel E stood out from the regular Polo thanks to a black spoiler around the rear window.

Later versions of the Formel E got a 1.3-liter engine and an early stop-start system called SSA that shut off the engine when it idled for over two seconds. The engine restarted automatically when the gear lever was moved to the left, and the system could be turned off entirely by flicking a switch on the dashboard.

The type 86c was given a thorough facelift in 1991. Although still considered mk2 cars, the post-1991 second-gen Polo featured new engines, thoroughly revamped front and rear fascias and a noticeably updated interior. The brakes and the suspension were also upgraded, enabling the mk2 Polo to carry on until the all-new mk3 model was introduced in 1994.

Below is a list of observations and driving notes we made while taking a second-gen Polo for a short spin around the Tegernsee Lake about an hour south of Munich, Germany.

The second-generation Polo feels much roomier inside than the first-gen model. The progress made between the two generations is evident as soon as you sit behind the wheel.

The engine provides adequate power at all rpms, it never feels like it’s missing punch and it easily keeps up with modern cars. It’s remarkably quiet, too.

The analog instrument cluster is function-oriented and easy to read. We like the neat fuel economy gauge that automatically turns on when the E gear is engaged.

The mk2’s suspension is not as soft as the mk1’s so it doesn’t lean as much in corners.

The brakes are very good for a car that is three decades old – we’re guessing a lot of mk1 Polo owners complained about not having a brake booster.

The interior is generally solid but the rock-hard door panels feel cheap. Still, the Polo seems better built than, say, an early-1980s Opel Corsa / Vauxhall Nova.

The van-like body gives the Polo an impressive amount of cargo space, especially when the rear seat is folded flat, but it’s too bad that the seatback isn’t divided. Being able to fold down one side or the other would make the Polo even more practical.