In 1999, a third-generation and fourth-generation GTI were offered, but buyers had to wait until later in the year, towards 2000, to get the new and completely redesigned model that was sleeker, faster and smoother driving with all-new features. A turbo model was introduced in 2000, offering 150 horsepower. New side marker lights, cup holders, head impact airbags and new interior fabrics as well as new wheels and a new multimedia equipped steering wheel earmarked the major changes for 2001.
In 2002, the GLS and GLX trims were discontinued, the GTI 337 racing trim was added, and the standard warranty was upped to four-years/50,000-miles. New wipers, updated sunroof functionality, backlit buttons and a leather wrapped steering wheel were the only substantial changes for 2003. The popular R32 model debuted in 2004, offering a beefed up engine with all-wheel drive. The GTI coasted through 2005-2006 with no significant changes.