You can't miss the irony: The company whose beloved Beetle became the basis for many of the first off-road vehicles is one of the last to bring a modern sport/utility to market. But it's been worth the wait. The all-new 2004 Volkswagen Touareg is no Bug-based dune buggy. Stylishly designed, masterfully executed, and supremely capable, the Touareg topped a competitive field to be named the 2004 Motor Trend Sport/Utility of the Year.

In creating its new sport/ute, VW had a specific driving mission in mind: anything. The Touareg deftly blends such carlike virtues as luxury amenities, a smooth ride, and precise handling with more traditional SUV qualities such as ample cargo space, exceptional ground clearance, serious four-wheel-drive off-road ability, and major towing. The result is a handsome SUV as adept at whisking four formally attired adults to the symphony as it is climbing boulders on the way to a remote campsite. Make that five adults in a pinch.

To pull off this challenging best-of-all-worlds balancing act, Volkswagen formed an alliance with Porsche. Not only did the Stuttgart-based sports-car maker need a sport/utility to expand its lineup, but Porsche's engineering arm could bring to bear all the experience it's gained developing cars and sport/utilities for other automakers.

The Touareg is thus based on an all-new unit-body platform shared with Porsche's new Cayenne. The two vehicles also share basic body structures (but no exterior sheetmetal), drivetrain bits, and suspension designs. The Touareg stretches just three inches longer than a Passat, although it stands nine inches taller and is considerably wider; it's also within a few inches of its German competitors, the BMW X5 and the Mercedes-Benz M-Class.

While other automakers aimed for provocative styling that emphasizes a particular niche in the SUV market, VW sensibly arrived at a look that might be best described as a tall Passat wagon on protein powder. From the start of our multiweek test, the Touareg's notebook began filling up with enthusiastic styling reviews. "Fresh, contemporary, adult," wrote one editor. "Handsome design--a purposeful look," noted another. To our collective eyes, the VW is also a more visually compelling package than its structural sibling, the Cayenne.