The car that began the whole "hot hatch" genre is back. Not as lithe and cat-like as the original, but the turbocharged 2007 Volkswagen GTi packs some serious muscle on a larger and more mature body.

After several versions of so-so models, the fifth generation GTi returns to the original premise of potency in a compact package with 200 horsepower, a brand new chassis and a choice of six-speed gearboxes.

VW hopes the new GTi will help the company re-establish its reputation in North America as a "halo" vehicle, presaging the arrival of a less-expensive mass-market Golf sibling, the hardtop/convertible EOS and a new minivan (to come from Chrysler) as a 2008 model. The GTi is initially available as a three-door hatchback with a five-door version due in the fall.

The new ultra-stiff chassis, derived from the Audi A3, provides a starting point to anchor an equally new independent suspension with MacPherson struts up front. The result is a total transformation. In stead of excessive lean and gross understeer (where the car wants to continue in a straight line even when the wheel is turned) of the previous version, this GTi plants and points with alacrity. The steering is well weighted and more responsive and the big new brakes erase speed with ease. Although the suspension is stiffer and the car more balanced, ride quality is still good.

While derivative of previous versions, there is no question this is a new Volkswagen. The body is more rounded and modern and the GTi designation clear: a red stripe surrounds a honeycomb grille, the glass is tinted blue, the fog lights are separated from the xenon low-and-high-beam headlight clusters, the brake calipers are painted red and blacked-out trim along the rocker panels joins similar treatment beneath front and rear bumpers. The interior is stylish and high tech with aluminum trim on the instrument panel and shift knob complemented by alloy pedals and "Heritage" fabric inspired by the original 1983 GTi. Leather is optional and in both cases the seats are partially-powered, torso-grabbing Recaro brand embossed with the GTi logo.

The extensive standard-equipment list includes everything from power windows and air conditioning to a full suite of safety features, including anti-lock brakes, traction control, stability control and side-impact and side-curtain airbags. The five-door version will also offer rear side-impact airbags. Rolling down the road are summer tires mounted to 17-inch alloy wheels with 18-inch units available as an option.

The GTi has been on sale for some time in Europe and actually comes from the company's Wolfsburg factory, so it is no surprise is equipped to run on the nearby A39 Autobahn at serious speeds. The turbocharged 2.0-litre four-cylinder features VW's high-pressure direct-injection system (FSi) that helps the little engine reach peak its torque values at a mere 1,800 R.P.M. and keeps it until 5,500 R.P.M. This means tremendous mid-range power, instant throttle response and no sign of turbo "lag".

The whole experience is made all the more enjoyable by a pair of six-speed transmissions. The manual version features short throws, clear gates and well-spaced ratios. In any other vehicle it would be the obvious choice. But the GTi can be equipped with VW's Direct-Shift automatic-manual gearbox (called DSG) that delivers lightning-fast (and smooth) shifts, no matter whether you use the console-mounted lever, the wheel-mounted paddles or let it run in full automatic mode. Think of DSG as a manual-shift transmission with automatic capabilities and not the other way around. It also helps the GTi accelerate quicker and provides better fuel economy than one equipped with the six-speed manual.

All this power and performance should help VW face the uphill slope before it. Dave Wicks, director of sales for North America, says 2005 could have been a better year and that the company faces a monumental task to get the VW brand back where it should be.

"The launch goal of the GTi is to make the VW brand relevant again," he said. If VW can follow this impressive newcomer with a competitively priced new Golf, that uphill climb will that much easier.