The three works teams that went into the season were MITSUBISHI MOTORS, Subaru and Ford, the last two fielding WR cars. They had a 4WD Group A rally car with a 2.0-liter turbo engine, but they used the freedom in development stipulated in the WR car regulations in order to increase the performance level. On the other hand, MITSUBISHI MOTORS ' car was a sheer Group A. It was not based on the LANCER EVOLUTION III, which was crowned champion the previous year, but on the LANCER EVOLUTION IV, which was released in August 1996 as an all-new model. The biggest structural change was the 180° rotation of the 4G63 DOHC turbo engine, and, along with that, the components that form the 4WD system featured an all-new design. The car was still fitted with a multi-link type rear suspension, but the trailing arm type left place to a double wishbone type. In addition, a sequential gearbox was implemented on the rally cars ahead of their rivals. With these modifications, MITSUBISHI MOTORS’ innovative advancements made an impression.

The MITSUBISHI MOTORS team's structure this year was similar to that of the previous year, with Tommi Mäkinen entering every round and Richard Burns’ participation increasing to eight rallies. In the remaining six rallies, Uwe Nittel (Germany), who finished second in the previous year's Group N Cup with a RALLIART Germany Group A spec LANCER EVOLUTION III, was designated to score Manufacturers points. Mäkinen, who was crowned world champion for the first time the previous year, took a total of four wins in the following rallies: Rally Portugal, Rally Catalunya (Spain), Rally Argentina and the 1,000 Lakes Rally (Finland). He actually won the championship in Rally Catalunya, which was held as an all-tarmac rally for the first time. This was the first MITSUBISHI MOTORS' victory in an asphalt (paved roads) rally. This clearly showed the appeal of the LANCER EVOLUTION and its progress to the status of an all-round contender that was able to perform on all road surfaces. In the final RAC rally, Mäkinen came down with the flu and was in his worst condition. But he managed to fight wholeheartedly through the rally and ended up defending his title. For the second year in a row, MITSUBISHI MOTORS grabbed the number one spot in the world.