Car is a Mk1 Golf. Driving around town the temperature behaves normally - it sits at the middle of the gauge, sometimes goes a little higher if I'm sitting in traffic but not much.
However, on the highway the temperature slowly decreases until it sits just below the 1/4 mark. Once back in city traffic it goes back up again and acts normally.
The car feels and drives fine in both cases. Is there any reason to be concerned?
(Note: it is winter here but temperatures only reach about 15 Celsius)
I'd lean toward the thermostat. It sounds like it may be getting warmed up and opening up in the city driving, then staying stuck open once you're on the highway.
Depending on conditions (primarily speed and engine RPM secondarily ambient temp) your coolant can be more efficient than the car wants.
If you're driving street and staying between 1500-3500 RPM, and at speeds below 50 km/h (or 30 mph... I'm American so excuse slight conversion mistakes ;) ), let's say that you get a cooling value of 5.
Now if you go 100 km/h you'd double the amount of air through your radiator and get a cooling value of 10. On a lot of vehicles, going 100 km/h in the final drive gear will leave you at a lower RPM if you're just cruising. (My wife's car for example sit around 2500 cruising at ~60 mph.) This of course means you motor is producing less heat, and getting double the cooling via air.
Normally your thermostat will close-up a bit to keep the motor in range, but if it stays open, it can very easily cause a significant drop in engine temp. So I'd start by checking that out. As a note, it may pass the usual boiling test, but just kinda stick open a little bit. So it could be very difficult to test without throwing a new one in.
No, there is no reason to be concerned.
As Kyle_Engineer explained, your speed greatly influences how much the radiator can cool the coolant before it re-enters the engine. While your fan will keep the engine cool enough in stop-and-go traffic, on the highway (both mechanical and electrical) fans shut off and just free wheel.
Another factor which influences the cooling of the engine is your RPM. Assuming your car has a mechanical water pump, the water pump is probably connected directly to your engine crankshaft. So if you are sitting in heavy city traffic at 750 RMP, and then get on the highway and start cruising at 3000 RMP, coolant will be pumped 4x faster on the highway (in theory).
As long as your thermostat gauge generally stays between 1/5 and 4/5, your engine is definitely in the "safe" operating range.
I am wondering if you have a thermostat.
Is your engine a diesel, because my A1 diesels would run about that way without a thermostat?
Generally, I use 87C thermostats.
One additional thing to keep in mind is that the temp gauge is non-linear. The best way to get the temp is to use a passive infrared sensor ("laser thermometers" and point it at a dark painted surface. The valve cover or the cylinder block. Shiny metal has a different emmissivity and can cause errors in measurements.
You really don't want the engine running long at low temperatures, because it doesn't get rid of internal moisture well.
You should verify the actual engine temperature first, to rule out sensor problems, etc.
