When the wraps came off the all-new Subaru Impreza at the New York Auto Show earlier this year, the covers had barely hit the floor when enthusiasts began asking about the next version of the hot STi.

The wait is over—Subaru introduced the 2008 Subaru Impreza STi at the L.A. Auto Show, and it appears to have been worth the wait. Referred to by Tim Colback, vice president of sales for Subaru of America, Inc., as a “wolf in wolf’s clothing,” the STi definitely looks the part of a rally car for the street.

Available only as a 5-door hatchback, the new STi boasts a 2.5-liter turbocharged horizontally opposed four-cylinder engine that puts out an impressive 305 horsepower—an increase of 12 over the outgoing model. Peak torque of 290 lb-ft is available at 4000 rpm. A 6-speed manual is the only transmission offered.

Power is put to the ground via Subaru's signature Symmetrical All-Wheel Drive System, but the STi also features a Driver Controlled Center Differential (DCCD). A number of settings are available to optimize performance for different driving situations and road conditions.

With the ability to accelerate to 60 mph in just 4.9 seconds, good breaks are also of high importance. The STi gets Brembo brakes with 4-wheel discs and 4-piston calipers in front, 2 larger calipers in the rear. Electronic Brake-force Distribution (EBD) and “Super Sport” ABS help to reign in the speed.

The 2008 STi is two inches shorter than the previous generation; however, the wheelbase is almost four inches longer and track is about two inches wider, which makes for shorter overhangs and improved handling.

The upgraded interior is roomier than the previous generation, with more legroom both front and rear, and more comfortable seats.

STi successfully combines the utility of a hatchback or wagon with the performance of a high-end sports car, and will go on sale later this year with prices starting around $35,000.