Hot Hatchbacks are one of our favourite market segments. They strike a lovely compromise between performance, economy and practicality – and usually, they ace all three. The king of the segment is generally agreed to be the Golf GTI. It wasn’t the first – but we’d argue it did it the best. And to this day, it’s still the benchmark of what a hot hatchback should be. But there’s a new player on the roads, and it’s gunning for the crown.  Enter the Hyundai Veloster N.

Hyundai has worked to shed their once negative image in Canada and the United States, and to their credit, it’s been largely successful. But the niche hot hatchback market is a tough one to break in to. Competition isn’t numerous, but they are well established. You might argue the Veloster Turbo (reviewed here) could be their first entry, but with its many creature comforts and punchy, but still tame engine and transmission setup, it’s almost more like a jalapeno in a sea of habanero. Still packs some heat, but there’s hotter varietals. But the N…it’s a ghost pepper.

The Veloster has always stood out, whether you like it or not. The funky 3 door design is certainly a unique one. In N trim, you get that quirky design with some aggressive go-faster bits, like a rear spoiler, resculpted front grille and some racier accents on the rocker panels. While it also comes in black or white paint, we’d go for the same Performance Blue finish like on our tester. It’s a little more understated than you might expect, and it coordinates nicely with the accents of the same colour on the interior. Plus, it’s a little reminiscent of the blue on the iconic Gulf racing livery.

Speaking of…the interior of the Veloster N doesn’t wow us the same way the outside does. But that might not necessarily be a bad thing. With a focus on performance, it makes sense for a more Spartan approach to a driver’s cabin. Cloth, manually adjusting seats, no sunroof, no automatic option.  There’s really not much more than the basics with little luxury. But that just means less superfluous weight. We do love the blue seatbelts and baby blue accents adorning the interior, including the all-important checkered flag button on the steering wheel. More on that soon.

The Veloster N boasts 275 horsepower from a turbocharged 2.0L 4-cylinder. Your only transmission choice – a very slick 6-speed manual. In ‘normal’ mode, the car is firm, but certainly usable. It can get a little stiff on a rougher road but is far from unusable. Hit that aforementioned checkered flag button and the Veloster N transforms. The steering gets heavier, the suspension stiffens up and the exhaust becomes a cacophony of snarls, snaps and cracks. Put your foot down and you’ll get kicked into the back of your seat. The way this car feels is nothing short of magical. Honda’s Type-R Civic was the best FWD car we had ever driven. This one is certainly a close second. There is some torque steer under hard acceleration, but it’s not intrusive. In a strange way, it almost makes the drive more engaging as you wrestle with the steering wheel, row through the gears and do your best to be an amateur race car driver within the legal limits of the road.

The enjoyment of your sporty drive may be cut short once you hit some rougher roads. If you thought it was a harsh ride in normal driving mode, prepare to shatter some teeth if you’re in sport mode. Thankfully, Hyundai allows drivers to set custom parameters for their sport mode. We kept everything at maximum sportiness, save for the suspension, which made driving through Toronto’s sometimes awful roads a little more bearable. We wouldn’t call the ride comfortable, but in a hardcore hot hatch, should that even be a priority? We’re glad Hyundai took this approach on the N, especially given its limited production.

The Veloster N starts just a dollar shy of $35,000 in Canada, putting it somewhere between the Golf GTI and the Golf R in terms of price, features and performance. The Veloster N is much more raw and visceral than the GTI, but isn’t as expensive or cushy as a Golf R. That’s not to say the Veloster N is a compromise though. This car is far more than just beginner’s luck. If this is what Hyundai’s performance division is capable of, established performance players would do well to treat the letter N with some newfound respect. The Veloster N more than deserves it.