The GTI version came in 1.6-litre and 1.9-litre, in-line four cylinder configurations, and is considered one of the very best hot hatches of all time. Compared to modern cars they can be tricky to handle, due to their tendency towards rather sudden lift-off oversteer during hard cornering, and a complete absence of electronic driver aids. However once mastered, or in the hands of a skilled driver, these cars are still known to offer a very rewarding driving experience. The 205 GTI was certainly one of the first front wheel drive cars said by many motoring experts to be as rewarding to drive hard as an equivalent rear-wheel drive car.
The 1.6 GTI came with a XU5J engine, producing 105 PS (77 kW; 104 hp) , for the 1987 model year the XU5J received the cylinder head with larger valves from the 1.9 GTI's XU9JA engine thus becoming XU5JA. The new engine was quoted for 115 bhp (86 kW; 117 PS) . The 1.9 GTI came with an XU9JA engine producing 128 PS (94 kW; 126 hp) , although later models with a catalytic converter produced 122 PS (90 kW; 120 hp) . Internally these engines are very similar, the main differences on 1.9-litre versions being the longer stroke, oil cooler, and some parts of the fuel injection system. The shorter stroke 1.6-litre engine is famed for being revvy and eager, while the 1.9-litre feels lazier and torquier. Outside the engine bay the main differences between the 1.6 GTI and the 1.9 GTI are half-leather seats (1.9 GTI) vs. cloth seats (1.6 GTI); and disc brakes all-round (1.9 GTI) vs. discs at the front and drum brakes at the back (1.6 GTI); as well as the 14-inch (360 mm) alloy wheels (1.6 GTI) vs. 15 inch alloys (1.9 GTI).
The 205 is still mentioned to this day in group car tests of the newest GTI models or equivalent. Peugeot itself has never truly recreated this success in future GTI models, although came very close with the highly regarded GTI-6 variant of the Peugeot 306. A cabriolet version of the 205, known as the CJ (or CT in France), was designed and partially assembled by Pininfarina of Italy. A CTi version, with the same plastic arches and wheels as the 1.6 GTI was also available. Some later models incorporated the catalysed 1.9 engine.
The main aesthetic difference between the GTI/CTi versions and other 205 models were the plastic wheel arches and trim, beefier front and rear bumper valances. The shell also underwent some minor changes, including larger wheel arches (to suit the larger wheels on the GTI and CTi), and the suspension was redesigned and sat lower on the GTI with stiffer springs, different wishbones and a drop-linked arb.
With the early success of the 205 GTI in Europe, Motor Trend reported in 1984 that Peugeot was seriously considering adding it to its US lineup, even though Peugeot had a more upmarket image in the United States. Nothing ever came of such rumours, however, and any talk of Peugeot expanding its presence in US became moot when it was forced to pull out in 1991. However , at least 1 or 2 of these models found their way into the U.S. as "Gray Market" vehicles ; the only currently registered 205 GTI in the US is a white 1986 1.6 model in Oklahoma City.
Sales of the GTI in the early 1990s were badly hit by soaring insurance premiums,[clarification needed] brought about by high theft and 'joyriding' of cars of this sort. Increasingly stringent emissions regulations meant the 1.6GTI went out of production in 1992, while the 1.9 was sold for a couple more years thanks to re-engineering of the engine to enable it to work properly with a catalytic converter, which dropped power to 122 bhp (91 kW; 124 PS).