N stands for Namyang. Or at least that was Hyundai’s declaration when it dreamed up the N performance sub-brand in 2013. It seemed a curious choice considering that Namyang, the South Korean home of Hyundai’s R&D campus, has neither the track record nor the actual track that might make the place synonymous with performance. There’s more elevation change in a typical Walmart parking lot than on Namyang’s handling course, and a simple autocross in said parking lot would be a better dynamic exercise for anything the N division might build. In fact, we’ve wondered whether Namyang’s modest proving grounds are a reason why Hyundai’s cars have remained dynamically indifferent even as quality, design, and feature content have rocketed ahead.

Someone at Hyundai must have recognized this, because the company soon claimed that N actually had two meanings: Namyang and Nürburgring. That resonated. The longest and most demanding racetrack in the world is an inimitable measuring stick. A Hyundai that could competently loop the Nürburgring Nordschleife would have to be unlike any we’ve known.

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That’s exactly what the 2019 Hyundai Veloster N is. Due in dealerships this November, the 275-hp front-wheel-drive hot hatch is the second vehicle developed by N and the first that will reach the United States. Placing its metal where its mouth is, Hyundai delivered us to Germany to hustle the Veloster N both around the Green Hell and on the surrounding roads through the Black Forest. During two laps of the 12.9-mile Nordschleife and an hour-long tear through the surrounding countryside, we reveled in an animated engine, faithful steering, assured body control, steadfast brakes, a remarkable resistance to understeer, and emotions we’ve never before unlocked while piloting a Hyundai.

N Follows M

There’s an easy explanation for the transformation on display here. The N division isn’t just phonetically similar and alphabetically adjacent to BMW’s M division. The Koreans went as far as poaching M veterans Thomas Schemera, the former Americas head, and Albert Biermann, who ran R&D for eight years. Biermann tells us Hyundai’s development process for this new brand of performance cars is no different from BMW’s, save that the N division has no dedicated engine-development team. Instead, the Veloster N’s mill is built from the turbocharged 2.0-liter Theta inline-four offered in the Sonata mid-size sedan. With new pistons to lower the compression ratio, a larger twin-scroll turbocharger, and a less restrictive exhaust system, the engine sees its output rise to an estimated 250 horsepower and 260 lb-ft of torque in the base Veloster N. The optional Performance package fitted to the car we drove includes a revised overboost strategy that pushes peak horsepower to an estimated 275.

Likely to be the only option other than paint color, the Performance package touches every aspect of the Veloster. In addition to the power bump, it includes an electronically controlled limited-slip differential, larger brakes, an active exhaust, and 19-inch Pirelli P Zero tires with the letters HN molded into the sidewall, denoting that they were developed specifically for this car. The suspension and steering are also recalibrated to play nice with this new hardware. The base Veloster N rides on 18-inch Michelin Pilot Super Sports and drives the front wheels through an open differential.

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A Hot Hatch That Can Hang with the Best

Capitalizing on the potential of the Veloster Turbo R-Spec, N’s first effort for the U.S. market exhibits the hallmarks of a master, not a freshman apprentice. The Veloster N keenly dives into corners and hangs on with tireless front-end grip. It approaches the limit with less understeer than the Volkswagen Golf GTI, and at a slower pace it exudes a playful verve that’s absent in the sober VW. The Hyundai doesn’t entice unruly antics or corner as neutrally as the Ford Focus ST, but then no other front-wheel-drive car does.

The 306-hp Honda Civic Type R is the N’s closest peer, not just in power output and drivetrain configuration but also in the way it attacks a road. Just breathing the name Veloster N in the same sentence as this Japanese rival (which has won both a comparison test and a 2018 10Best Cars award) speaks to what Hyundai has accomplished here. Both cars hold in common a fluid chassis, a responsive powertrain, and an absence of torque steer.

Hyundai’s boosted four-cylinders often run out of breath near the top of the tachometer, but not this one. The tweaked 2.0-liter is strong across its entire 6750-rpm sweep. Turbo lag is trivial, masked by a torque plateau that forms at 1450 rpm. Running the ’Ring mostly in third and fourth gears, the Veloster demonstrates a broad and flexible midrange that wrenches the car out of corners. Only the exhaust note leaves something to be desired. From inside the car, it sounds as if the engine is muffled with a dozen cardboard boxes nested like Russian matryoshka dolls.

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A six-speed manual is the sole transmission for the moment, and it includes a rev-matching function that can be switched on and off with a dedicated button on the steering wheel. Biermann says an optional eight-speed dual-clutch automatic is coming, although not for a couple of years. Assuming the N is feathery light in the same way other Velosters are, we expect a curb weight between 3000 and 3100 pounds and a zero-to-60-mph time of less than 5.5 seconds.

On a toboggan-run stretch of unrestricted autobahn, gravity helped pull the N beyond Hyundai’s claimed 155-mph Vmax to an indicated 166 mph. More than that number, the Veloster impresses with how utterly unfazed it feels at triple-digit speeds. It is stable and improbably quiet, with none of the jittering windshield wipers or fluttering hood that might suggest less than thorough engineering.

The N scrubs speed assertively with an alert and firm pedal. The upgraded brakes—vented discs at all four corners with two-piston sliding calipers on the front axle—are lifted from the Korea-market Kia Optima, which is sold there as the K5. Hyundai says that using these in-house parts, rather than turning to a blue-chip supplier such as Brembo, is key to preserving that hallmark value, and it appears to have pulled off these kinds of penny-pinching decisions without compromising the car.

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But don’t think of the N as a simple parts-swapping exercise. Compared with other Velosters, this one earns additional unibody welds and stiffening braces where the struts mount, across the center tunnel, and tying the front subframe to the body. The power-steering motor is located on the rack, while lesser Velosters use a column-mounted unit, which reduces inertia and friction in the system to improve feel. Biermann has also made a point to increase the self-centering torque in the calibration of each Hyundai vehicle he has touched. That makes the on-center valley more prevalent and gives the steering more heft off-center. In the Veloster N, this strategy leads to just-right weighting, even if you’d still need an amplifier to extract significant feedback.

We’re left to wonder how ride quality will measure up on U.S. roads. On the ’Ring, the Veloster proved quite stiff, and through the notoriously choppy Karussell, the Veloster pumped and chattered. This latter fact wouldn’t have raised eyebrows, except that we rode shotgun in Hyundai’s i30 N race car and it skated through the same section with unflappable grace, proving that a car can be more supple than the Veloster without sacrificing sharpness. We were comforted a bit when we relaxed the standard adaptive dampers on Germany’s (admittedly smooth) roads the following day.

The Veloster N’s bolstered sport seats are nothing special to look at, but they strike the right balance of canyon-blitzing support and daily-driver comfort, while the beefed-up steering wheel feels natural. From the spokes, the driver can cycle among Eco, Normal, Sport, N, and Custom driving modes. The last one allows independent adjustment of the throttle response, the engine sound (via speakers and the active exhaust), limited-slip behavior, damper stiffness, steering calibration, stability control, and even the rev-matching map. The seatbelts and trim accents are tinted in the N brand’s Performance Blue, and the exterior fascias and side sills are marked with Signal Red flourishes (unless the car itself is painted red). While it’s hardly the caricature that the Civic Type R is, those red streaks and the asymmetric three-door configuration give the Veloster N a more juvenile attitude than a GTI or the Golf R.

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You Will Come to Know Namyang

There remains one unknown that keeps us from passing full judgment on the Veloster N: price. Hyundai reps will say only that they’re targeting the sprawling gulf between cars such as the Honda Civic Si, Subaru WRX, and Volkswagen Golf GTI and the roughly $35,000 opening price of the Civic Type R, WRX STI, and (nearly $40,000) Golf R. Then again, when has Hyundai ever priced itself out of the game? If the Veloster N comes in around $29,000 as we predict, it will represent a strong value. Figure $2500 as a fair price for the Performance package, at which point the Hyundai would still be about $4000 cheaper than the Civic Type R.

Assuming it becomes reality, that Hyundai discount will, for once, cover only the gap in brand reputation rather than dynamic shortcomings. Cars like the Veloster N represent Hyundai’s best opportunity to close that gap, especially if the engineers can transfer this success to the mainstream cars and crossovers. If Hyundai keeps this up, Namyang just might claim the letter N as its own.

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