By Jim Meachen and Ted Biederman

We liked the all-new 2019 Hyundai Veloster when we tested it a few months back with its upgraded styling inside and out, sport-tuned suspension, a larger cargo area than the previous iteration, and a very healthy 201-horsepower 1.6-liter turbocharged 4-cylinder engine. And now we are pleased to report that Hyundai has taken it up another notch becoming the first American car to get the company's performance N treatment.

The upgrade increases horsepower from between 250 to 275 and adds an active exhaust system, larger brakes, an electronically controlled limited-slip differential, adaptive dampers, customizable drive modes, rev-matching automatic heel and toe downshifting from a short-throw silky smooth six-speed manual transmission (the only one offered), and 19-inch wheels shod in Pirelli P Zero tires.

The 250 horsepower engine starts at $27,820 including destination. The performance package with 275 horsepower is $2,100 bringing the bottom line to $29,920. But the brilliant, even revolutionary, thing it does is something that’s only revealed once behind the wheel. And we put our winding road "test track" to use to discover the Veloster N's handling prowess.

Originally developed at Hyundai’s research and development center in Namyang, South Korea, the N in the Veloster’s name is strongly linked to its true development site: Germany’s Nurburgring-Nordschleife. Considered to be the benchmark for high-performance driving and testing, the 13-mile circuit with 73 bends, and numerous elevation changes, has a reputation as the world’s most grueling and dangerous road course.

Hyundai's N is similar to designations like Ford Focus ST, Volkswagen R and Honda Type R — top-tier front-wheel drive performance trim levels. The N was developed by BMW M performance division’s Thomas Schemera and Albert Biermann, who ran the German R&D before signing on with Hyundai. The Veloster N clearly marks a new era for the brand, signaling that Hyundai is more than just well-built family vehicles with long warranties at a bargain price.

Notably quirky, the N offers some surface excitement over the base Veloster — exclusive N-design front fascia with front air ducts for enhanced brake cooling, N-design rocker side sills with red accents, red brake calipers, available lightweight 19-inch alloy wheels, a tricked-out larger N-design rear spoiler, rear fascia design with integrated diffuser, and larger high-flow dual exhaust.

While the 275-horsepower version of the N is no speed-merchant, it puts up good numbers that should satisfy — considering its outstanding handling capabilities — measured at 5.2 seconds from 0-to-60 and a quarter-mile time of 13.9 seconds at 102 mph.

Inside, front seats with abundant legroom are cloth with extra bolstering for performance driving support. Rear seat leg and headroom are nearly non-existent, but with the Veloster's unique three-door design — there's a small rear door on the passenger side — entry and exit is relatively easy.

Inside, there are N-logo designs on the steering wheel, shift knob, instrument cluster, and doorsill plates. A black cloth interior with blue stitching is the only color offered. A nice touch is the light blue seat belt color. There’s an eight-inch color touch-screen display that controls both the standard Apple CarPlay and Android Auto infotainment features. There’s also push-button start and wireless smartphone charging. All operational controls are well laid out and intuitive. And thankfully the Veloster has actual knobs and push buttons for most functions.

The Veloster has an abundance of advanced standard safety features available, including forward collision avoidance assist with automatic braking. The N version adds additional safety features including blind-spot assist and pedestrian detection, lane keeping assist and adaptive cruise control.

Our N test car with the performance package was loaded with standard equipment — no options needed and very few available — and came in at $30,125 including destination charge. In addition to the upgraded eight-inch infotainment display, it was equipped with an eight-speaker Infiniti Premium sound system with subwoofer, hill start assist, and keyless entry and start.

Add it all up — the well bolstered and excellent seating position of the seats, the performance and smoothness of the powertrain, the outstanding cornering achieved via the electronically-controlled torque-vectoring N Corner-Carving Limited-slip differential, a multiple drive mode selection system, rev-matching, steering feel and yaw-control characteristics, heat-dissipating brakes, and Pirelli tires all at under $30,000 — make it a small car with a feisty, lean, and taut feel that’s a hoot to drive around town and an absolute riot to drive on the track.

If you like the Veloster, but don't want a manual transmission, the energetic 1.6-liter turbocharged model with 201 horsepower and a seven-speed dual-clutch automatic will bring a smile to your face with 6.2-second 0-to-60 time and a starting price of $26,320 including destination charge.

Essentials
Base price: $27,820; as driven, $30,125
Engine: 2.0-liter turbocharged 4-cylinder
Horsepower: 275 @ 6,000 rpm
Torque: 260 pound-feet @ 4,50 rpm
Transmission: 6-speed manual
Drive: front wheel
Seating: 2/2
Wheelbase: 104.3 inches
Length: 167.9 inches
Curb weight: 3,106 pounds
Turning circle: 34.8 feet
Luggage capacity: 19.9 cubic feet
Fuel capacity: 13.2 gallons (regular)
EPA rating: 22 city, 28 highway, 25 combined
Also consider: Volkswagen R, Honda Civic Type R, Ford Focus ST

The Good
• Outstanding handling
• Energetic engine
• Full range of standard equipment

The Bad
• Muffled engine note

The Ugly
• Tight rear seating

Jim Prueter contributed to this review