With 72,412 sold in 1977 alone the car was initially popular, outselling the Polo sister model in that year, but sales quickly tailed off in subsequent years. During 1981, Volkswagen introduced the second generation Polo and the second generation Derby; in 1984 the Derby name was dropped and the saloon version of the Polo became the Polo Classic.
Most parts of the Derby are interchangeable with the Mk1 Polo, and many drivetrain components are compatible with the Mk2 models. Body parts at the rear and also the rear window are different and are directly attributable to the original design version of this vehicle, which was intended to be marketed as the Audi 60. Lights of the early version are the same as the Mk1 Polo and the car which began this design: the Audi 50, which dates to just before the full merger of Audi and Volkswagen. This was 1979 Semperit Irish Car of the Year in Ireland.
In Europe, the Derby was available with 0.9-litre (895 cc), 1.1-litre (1,093 cc) and 1.3-litre (1,272 cc) four-cylinder engines, with 40, 50 and 60 bhp respectively. The Derby Formel E ("Formula E"), offered in 1981 only, was an economy-optimised Derby featuring, among other things, a longer ratio gearbox, automatic engine turn-off when idling and a high compression version on the 1.1 L engine that demanded super instead of regular petrol. The Formel E concept was also available on other contemporary VW and Audi models.
In 1980, the Derby underwent a face lift together with the Polo. The restyle attempted to separate the styling of the Polo and the Derby more significantly, which also brought the styling of the Derby into line with its bigger counterpart the Volkswagen Jetta. These revisions included rectangular headlamps, a restyled grille and plastic bumpers, together with some interior changes including a new dashboard and instrumentation taken from the Mk1 Golf. In 1984, the Derby was re-badged as the Polo Classic in Europe, and the Derby's unique squared headlamp front end, which had been carried over from the Mk1, was replaced with standard Polo equipment.
In the UK, the Derby name was dropped with the Mk1, and the Polo Classic name was used from the Mk2's inception. However, early Polo Classics still retained the Derby styling. In turn, the "Classic" branding for the saloon was dropped in 1987 which meant that the Polo and Derby integration was complete.
This model was not sold outside Europe, although some parts of Eurasia did get the Derby – Turkey, Cyprus and Malta were the main export markets within Eurasia, also some parts of Eastern Europe bordering on Asia had this car. The name was used on a re-badged SEAT Cordoba in Mexico, but marketed as the Volkswagen Polo Classic saloon in Eurasia.