KEEN pricing, strong performance, sharp handling and unique styling touches should establish Volkswagen's re-born Golf GTi as a leader in the hot-hatch segment.

Its $39,990 opening price undercuts the $41,900 BMW 120i, Renault Megane Sport 225 and Honda Integra Type S (both $42,990), and is lineball with the class-leading Subaru Impreza WRX.

Only the lesser-powered Renault Clio Sport, Peugeot 206 GTi 180, Mini Cooper S, Alfa Romeo 147 and new Citroen C4 VTS Coupe slide underneath the hot Golf, although the first three are significantly smaller.

VW is keen to point out the "GTI-ness" of its latest model, arguing it is beyond a boy-racer "stickers and stripes" special.

For the record, the exterior titivations run to a liberal lashing of high-gloss black finish around the grille and pillars, darkened headlight bezels (silver if Xenon is specified), a roof spoiler, a honeycomb pattern for the grille and lower air-intakes, two chrome exhaust pipes and widened sill panels.

Supporting this are 225/45 R17 tyres shod on Australian-supplied 17x7.5-inch alloys (that are in fact similar to the factory 18-inch items) and ensconcing red brake callipers.

But for GTi fans it is what lies beneath that makes all the difference compared to the last, and rather lacklustre, model sold here.

At the latest GTi's heart is a turbocharged and intercooled version of VW's 2.0-litre FSI (direct injection) twin-cam 16-valve four-cylinder engine - a production-car first, although Australians have seen it already in this year's Audi A3 Sportback and A4 2.0T models.

Modifications to this unit over the regular 2.0 FSI have been numerous.

They include a change to a cast-iron block from alloy for greater strength, heat-resistant and forged pistons, trapezoid design conrods, a forged steel crankshaft with enlarged flanges and a unique tooth belt drive for reduced vibration and resonance.

The cylinder head uses "low-friction roller rocker fingers, heavier valve springs and armoured valve seats'. It has an adjustment range of 42 degrees to the crank angle, and "contains three cams on the inlet camshaft to increase the delivery rate of the high-pressure pump". Injection pressures are up to 110-bar.

All this helps produce a power rating of 147kW at 5100rpm, while the torque top is 280Nm, spread between 1800 and 5000rpm - all "without a hint of turbo lag", according to VW.

The latter's achievement is aided by a high compression ratio of 10.5:1, along with the Euro IV emissions-meeting engine's continuous inlet camshaft adjustment and variable intake manifold.

This compares to the 1999-2004 GTi's 110kW/210Nm 20-valve 1.8 turbo.

From launch, there are two gearboxes available - a close-ratio six-speed manual and VW's acclaimed DSG twin-clutch automatic for an extra $2300.

As already sampled in local Audis, the DSG, honed in the GTi application for greater performance, basically amounts to two electro-hydraulically regulated wet clutches, with one permanently poised with the next gear for seamless, split-second activation.

Its main advantages are an even flow during gear changes, increased refinement and reduced fuel consumption. You can also add more driving pleasure to that.

Surprisingly for "just an auto", it means the GTi with DSG is the quicker of the two transmissions, as the claimed 6.9-second versus 7.2-second 0-100km/h sprint times attest to.

The top speed is 235km/h, while the official fuel consumption average is 8.0L/100km for the DSG. This is a 0.1-litre saving over the manual.

Keeping this performance in check is a revised suspension set-up, which has been lowered 15mm.

It also boasts harder springs and dampers and a 20 per cent stiffer (from 25N/mm to 30N/mm) rear stabilisers, while the electro-mechanical power steering system gives better feedback thanks to a sportier "GTi" program.

On the safety front there is a re-fettled electronic stability program (ESP), along with traction control, an electronic diff lock, a 16-inch brake system featuring anti-lock and brake assist. The front discs have a 312mm diameter while the rears are 286mm.

Security levels have also been raised with the inclusion of an alarm system with interior monitoring.

Over and above the up-spec Golf Comfortline and Sportline, buyers receive a uniquely shaped, leather-wrapped steering wheel (the bottom of the rim is flat) and gear knob, aluminium pedal caps, brushed aluminium cabin trim inserts, revised instrumentation graphics and a six-disc CD changer.

DSG models also feature paddle shifts that are easily accessible when both hands are on the steering wheel.

All GTis are fitted with six airbags, active front head restraints on bespoke sports seats, climate-control air-conditioning, cruise control, a trip computer, rain and headlight sensors with a shut-off illumination delay, tyre pressure monitors and fog lights.

These are on top of standard Golf fare of power windows, electric mirrors, keyless entry and steering wheel audio controls.

Options are limited to leather upholstery ($2990 for either an anthracite or beige hue), bi-Xenon headlights ($1890), a sunroof ($1890) and satellite-navigation ($2990).

Metallic paint adds $690 if red, black or white isn't right. A "Shadow Blue" and "Reflex Silver" are the choices.

For the few Australians who may have experienced the GTi original abroad, its tartan cloth returns to this edition as the standard seat trim.

VW has ordered 500 GTis for Australian consumption this year. To date, dealers are holding orders for more than 100.

The model mix is 50/50 manual/DSG, although the company expects the automatic to account for 60 per cent once word of its slightly superior performance and fuel economy gets out.

And although the three-door body configuration is not yet slated for local availability, VW will be reassessing the situation once production frees up from its South African plant.