It's taken more than 40 years for Volkswagen's Golf GTI to become an automotive icon.

The German pocket rocket is considered the original – and to most, still the best – hot hatch, a car that fuses affordability with fast-paced fun and everyday practicality.

It's a formula that has been copied by many, from Abarth to Volvo and almost every other European brand in between, creating a little league of front-drive funsters that tickle the heartstrings of enthusiastic drivers while providing pragmatic all-round user friendliness. If you have to have just one car, a hot hatch essentially satisfies both the head and the heart.

And now Hyundai wants a slice of that action too. The South Korean car maker has traditionally appealed more to the cash-conscious families, building its reputation on humble, value-packed small cars, sedans and, more recently, SUVs. But it is now venturing beyond its conservative roots and stretching itself with the stand-alone Genesis luxury brand and the upcoming N high-performance division.

The latter is a big deal for the brand, building on the legitimacy of its regular road cars, opening it up to younger, but also more discerning, customers and leveraging its front-running form in the World Rally Championship.

In fact, it's such a big deal that it has hired some of the biggest names in the performance car business, a team led by the former boss of BMW's M division Albert Biermann, and with the famed and feared Nurburgring circuit in the backyard of its European research and development headquarters.

"Our whole story at N is about the driving fun, and especially focusing on the cornering," Biermann told Drive.

"This is what we live for and work for. We love the corners. Our logo is like a chicane on a track, and that is where we put most of our efforts - getting through the bends.

"Normal-spec hot hatches, you can take to the track for one or two laps and then the fun is over. But our cars can handle this more, as they are built for track driving straight from the showroom while still being comfortable to drive everyday to your office."

2018 Hyundai i30N preview drive. Photo: Supplied

With Australia's insatiable appetite for performance cars (brands such as Mercedes-AMG, BMW M, Audi Sport, RenaultSport, Porsche, Ferrari et al are experiencing record sales at the moment), Hyundai's local outpost will play a significant role in the success of the N division, which is why we're here today at a top-secret test track north of Sydney to sample a prototype version of the i30N months ahead of its debut.

Its design details are hidden under a cloak of psychedelic stickers and purpose-built camouflage because it isn't due to be seen until its official reveal in the lead-up to the Frankfurt motor show in September, and Hyundai executives are still cagey on precise mechanical details.

What we do know is that the i30N will be offered in two model grades when it goes on sale in Australia next year, both in five-door body styles and powered by a 2.0-litre turbo charged four cylinder that drives the front wheels through a six-speed manual gearbox with adaptive suspension. The entry-level variant will have 184kW/380Nm and an open diff featuring torque vectoring by braking with 18-inch wheels wrapped in Michelin Pilot Sport tyres and lower-grade interior trim while the Performance Pack offers 202kW/400Nm, an electronically-controlled limited slip diff, a shorter final drive ratio, bi-modal exhaust, larger 19-inch alloys with Pirelli P Zero rubber, bigger brakes and leather and suede trimmed sports seats.

Hyundai is a long way off finalising pricing and other equipment levels for local customers, but it is expected that the two models will straddle the $40k barrier – ensuring Hyundai continues its value-for-money philosophy while giving rivals like the Golf GTI a bloody nose.

While there's still a lot to know about how it looks from the outside, there's less masking on the i30N prototype's interior which allows us to see how it embellishes the impressive layout of the latest-generation hatch with a host of features exclusive to the N model. For starters, the heavily bolstered seats in the Performance Pack are snug in all the right places and yet feel comfortable enough for long journeys with plenty of adjustment to suit most drivers. Then there's the large 8.0-inch multimedia screen which has a specific N mode that displays performance parameters such as g-forces, lap times, power and torque outputs and offers customisable settings for the engine, suspension, steering, diff (in the Performance Pack), transmission rev-matching, exhaust note and stability control.

It also showcases a graphic element of the what the front-end of the i30N will look like without its makeup on. Although we're sworn not to reveal any details, I can tell you it looks pretty sharp with a clear reference to the World Rally Car which is nice. Performance car punters won't be disappointed.

The most noticeable difference, however, is two large pale blue paddles under the spokes of the steering wheel, the left one used to toggle through the Eco, Normal and Sport modes while the right gives immediate access to the full-house N setting. Or press it twice for a pre-programmed personalised set-up.

There's also a few elements that seem eerily familiar, such as the golf ball-style gearknob that pays homage to the Golf GTI as well as the array of orange and red lights on the outside of the top-end of the tacho and a horizontal set of shift lights in the centre of the instrument panel, both of which are lifted directly from BMW's M cars. Wonder where that came from?

Upon pressing the starter button, the engine quickly awakens with a blurt from the twin tailpipes that makes it sound like no other Hyundai before and one that sets the tone for the character of the car. The six-speeder also clicks into gear with an element of mechanical precision. As far as first reactions go, even before we get moving, the i30N has a lot going for it. But it also has a lot to live up to.

It doesn't take long to cement that positive impression though as the engine spins up quickly, with a linear power delivery that feels strong right across the rev range and a gruff soundtrack that is amplified in N mode by a tube that plumbs the intake note into the cabin for a richer note. It crackles and pops too in between quick gear changes, and gargles on the over run when you let off the accelerator. It's got charm. Tick.

It's quick too, building speed rapidly from the middle revs before charging towards its 6500rpm cutout. The gearbox has a positive feel to its shifts, but it could be a little tighter in the action with a shorter throw across the gates – something Beirmann agrees with and says the team are working on before committing the final production specifications.

Where the i30N really shines is in the way it ties everything together through the corners, with tremendous grip, great traction and brilliant brakes. The steering could do with a bit more meat to its resistance in N mode - and some separation from how it feels in Sport - but it's precise, consistent across the ratio and has decent feedback from the front hoops. And it's difficult to assess how the suspension handles bumps as the tarmac was mostly smooth, but as far as a track car is concerned it has excellent body control, turns-in sharply and carries plenty of mid-corner speed. The brakes, on the other hand, appear faultless with brilliant pedal feel, strong stopping power and good resistance to fade.

At the other end of the scale, with the drive mode re-set back to Normal mode, it feels relatively refined and easy to drive in everyday conditions.

We'll reserve full judgement on the i30N's absolute abilities until the production car arrives, as Biermann admits there is still some fine-tuning to be done to inject a bit more at-the-limit playfulness in the chassis, but, if anything, our preview drive has showcased that Hyundai has created a car that could re-set a few dynamic benchmarks straight off the bat. It's fast, fun and flexible. It's a proper hot hatch.

Volkswagen has taken 40 years to create a hot hatch icon, but Hyundai could have created itself an overnight hero.

Hyundai i30N Price and Specifications

On-sale: Early 2018

Price: from $37,500 (estimated)

Engine: 2.0-litre four-cylinder turbo petrol

Power: 184kW (202kW Performance Pack)

Torque: 350Nm (400Nm Performance Pack)

Transmission: 6-spd manual, FWD

Fuel use: TBA