340 horsepower turbocharged engine. Four wheel drive. 7-speed twin clutch automated manual gearbox. 0-60 in 4.6 seconds, and a top speed of 155 miles an hour, electronically limited. They sound like the specifications of some exotic low slung sports car, don’t they? How about all of those things in a practical five-door hatchback?

Meet the Audi RS3 Sportback, the latest and greatest car from Audi’s RS division. It slots into the model line above the already-rapid S3 Sportback, and it’s – to put it plainly – the fastest hot hatchback the world has ever seen. Sure, Ford’s Focus RS500 has more power – 345bhp – but it’s not as rapid, owing to the limited traction of front wheel drive and having to shift your own gears.

The powertrain is shared with the Audi TT-RS, which is on the same chassis as the A3 (hard to believe, since they don’t look alike, but the TT has always been based on the Golf platform.) The engine is a 2.5L inline-five cylinder, with an iron block and aluminum head. Direct injection allows a high 10.0:1 compression ratio, and combined with a Borg-Warner turbocharger pushing 17psi into the engine, the little five puts out a lot of power: 340 horsepower (250kW) and 331lb-ft (450nM) of torque all the way from 1,600-5,300rpm. Despite the prodigious power and mid-range torque, the TT-RS will average 25.85 US MPG, surprisingly good for a hatchback that could outrun a Ferrari Testarossa.

Power is transmitted through VAG’s new 7-speed twin-clutch DSG unit to all four wheels via a Haldex AWD system. The DSG (now called S-Tronic, but I like DSG better) has a Drive and Sport mode for automatic function, as well as a manual mode and a likely violent launch control, which one assumes is how they attained that crazy 0-60 time. Besides the power, Audi has upgraded the RS3′s chassis so the handling matches the acceleration.

Front track width is wider, and the RS3 sits an inch lower to the ground than a regular A3 model. Front suspension is still MacPherson struts, and the rear is a four-link independent setup. Braking is handled by 4-piston 370mm internally vented discs up front, and 310mm 2-piston internally vented discs at back. Like all modern Audis, there’s an ESP mode with a “sport” function for increased slip angles before the system intervenes, which should be nice – VAG’s stability control systems have traditionally been pretty aggressive.

On the outside, the RS3 gets the RS appearance, with gaping air intakes on the lower bumper with an anthracite frame, Xenon headlights with LED running lamps, and a single-frame grille. The RS3 gets the same 5-spoke turbine-shaped 19″ alloy wheels as the TT-RS, and the flared out fenders bring back memories of the bonkers old V8 twin-turbo RS6. I’ve never liked the chrome mirror caps, but they’re an Audi S/RS styling cue so they’re present here, while out back a spoiler tops the hatch above, while two chunky exhaust pipes poke out of the black diffuser like shotgun barrells. All-in-all, it’s a subtlety aggressive package, and only those in the know are going to notice it’s something more than a run-of-the-mill A3. Which can’t exactly be said of the matte-black Focus RS500 with it’s gaping front-mounted intercooler, black wheels, huge wing, and booming exhaust.

There aren’t any pictures of the interior yet, but the press release states it hasn’t been ignored either. The RS3 gets standard sport seats with optional “bucket seats” (probably Recaros?), there’s silver contrast stitching, RS3 logos scattered here and there, interior inserts in either piano black (yes!) or aluminum (again?), and a flat-bottomed sport steering wheel. In other words, it’s been spruced up to remind you you’re not in the 150 horsepower A3 2.0 TDI. Also, the driver information center (in between the speedometer and tach) will display boost pressure and oil temperature as well as lap times in addition to it’s other information – a nice touch.

Now, there’s good news and bad news. The good news: the RS3 Sportback will being going on sale in early 2011. The bad news: it’s priced at €49,900, which is $68,000 and change converted into US dollars. More bad news: it’s extremely unlikely this car will ever see the light of day here in America. Considering Audi had to be convinced via a petition to bring the TT-RS here, it seems unlikely they’re interested in selling the same powertrain in a hatchback like the A3, which has been a very slow seller in the US. A shame, to put it lightly. Still, to our European friends – if you want the fastest hot hatchback ever to hit the street, now’s your chance!