Production: 1979-1989
Engine(s): 1.6L & 1.8L (NA & Turbo)
Power: 67hp (1.6L), 73hp (18.L NA), 95hp (1.8L Turbo)
Transmission(s): 3 speed automatic, 4 speed manual or 5 speed manual
Drivetrain(s): FWD or AWD
Seating: 4

In June 1979 the Leone saw its first complete model update. This generation was released with a two-door hardtop coupe, four-door sedan, station wagon and a three-door hatchback. The United States did not see this generation until 1980. New for this generation was a dual-range four-speed 4WD transmission with both hi and lo range gearing. In November 1981 Subaru introduced Japan’s first all-wheel-drive vehicle with an automatic transmission, utilizing the world’s first “wet hydraulic multi-plate clutch”. This allowed the driver to engage 4WD with a simple push of a button rather than shifting a lever as in the manual models.