The Volkswagen GTI arguably created the hot-hatch segment when it was introduced in the U.S. as an ’83 model. At the time, most hatchbacks plying American roads were substandard and pedestrian economy cars.

But things have changed. Honda now is in the picture with its Civic Si (albeit a sedan and coupe) and Ford with its Focus ST, both worthy competitors to the GTI’s throne.

For ’15, the seventh-generation VW Golf GTI is powered by a 2.0L turbocharged, direct-injection 4-cyl. engine producing 210 hp and 258 lb.-ft. (350 Nm) of torque is significantly more than the 207 lb.-ft. (281 Nm) of twist with the same engine in the Beetle GSR, tested last fall for Ward’s 10 Best Engines.

An optional Performance Package bumps the output to 220 hp and adds a torque-sensing electronically controlled limited-slip differential and larger brakes.

While the car is quick, the GTI never has been about straight-line performance, but rather the combination of above-average power for its segment and superb handling. In that regard, the ’15 model does not disappoint. It’s bigger, lighter, faster and more fuel-efficient than its predecessor.

The GTI differs in a number of ways from the base Golf, including having a lowered sport suspension and thicker front and rear anti-roll bars, which help provide its superior handling characteristics.

Additionally, the GTI can be ordered with VW’s adaptive damping system, which manages the suspension’s rebound and compression rates individually. The result was a smooth ride that didn’t sacrifice the suspension stiffness necessary to confidently handle challenging turns.

Another handling enabler is the GTI’s progressive power-steering system, which changes the steering ratio when traveling at high or low speeds. The system greatly improves handling by automatically adjusting the amount of effort needed to turn the wheel.

The system works as advertised, feeling heavy and sporty in the twisties and light and comfortable in parking lots.

The ’15 VW GTI comes with either a 6-speed manual or dual-clutch transmission. Behind the wheel of a model equipped with a manual, throws are short and precise, making for an engaging drive.

Outside, the GTI’s sheet metal doesn’t differ greatly from the base Golf except for a few minor changes, including a red horizontal accent bar on the grille and LED fog lights incorporated into the front fascia. Other differentiators include GTI badging, red Brembo brake calipers, side skirts, aluminum-tipped exhaust pipes and special GTI wheels.

The interior also is similar to the base model but accentuated by red ambient lighting, a black headliner and trim inserts as well as backlit buttons and switches. Our attractive test vehicle came with black leather seats with red-leather stitching, the same combination that won the new GTI a 2014 Ward’s 10 Best Interiors trophy. The classic plaid GTI seats are still available, as well.

The ’15 GTI carries on the proud tradition of its predecessors, but the competition is more formidable than ever. With a reasonable base price of $24,395, the GTI represents a significant value with great performance.