Volkswagen's sport/utility is packed with standard active-safety systems. Huge anti-lock four-wheel disc brakes are equipped with electronic brake force distribution and Brake Assist. ASR traction control and ESP dynamic stability control can cut power and apply individual brakes to keep the Touareg on its intended course. Hill Rollback Control keeps the SUV from rolling back on a steep incline by locking the transmission, while Hill Descent Control helps keep downhill speed out of the white-knuckle range by limiting engine torque and modulating the brakes. If all else fails, the Touareg features multistage dual front airbags, front side-impact airbags, and head curtain airbags for both seat rows.

Could VW's new SUV be improved? Sure. Some buyers might wish for the flexibility of a third-row seat. We've noted some unpleasant wind noise from the roof rack at high speeds; throttle pedal travel seems unnaturally long; and the optional navigation system doesn't include street names on the maps (an updated system with names will be introduced next year). Power output from the standard V-6 is adequate, but no more.

Such quibbles are minor. In the final analysis, the Touareg is a dazzling new SUV, a versatile and competent player that'll meet or exceed the expectations of soft roaders and hard-core SUV truckers alike. The Touareg is a fine value, too: With base prices starting at $34,900 for the V6 and $40,700 for the V8, the modern and up-to-date Touareg is priced thousands less than its counterparts from BMW and Mercedes--and tens of thousands less than the Porsche Cayenne.

When you think about it, the Touareg is a natural development from the company that brought us one of the original multipurpose vehicles, the Microbus, and the mud-puddle-hopping Thing. The idea of a sport/utility from Volkswagen makes perfect sense. We'll go even further and declare that the 2004 Volkswagen Touareg is a spectacularly appealing SUV and earns its place as Motor Trend's Sport/Utility of the Year.

The Sport/Utility Coattails Effect
Volkswagen's first-ever sport/utility arrives at an important juncture for the automaker. VW has been losing sales over the past year due to the aging of its Jetta, Golf, Passat, and New Beetle. Adding the Touareg helps Volkswagen retain customers who'd otherwise have shopped elsewhere. Planned annual volume for the Touareg is in the 35,000 range, roughly 10 percent of VW's North American sales. In recent years, sport/utility sales have turned the tide at Lexus (RX 300), Acura (MDX), and Volvo (XC90)--all past Motor Trend Sport/Utility of the Year winners--and we have every reason to believe the Touareg will do the same for VW.--Ron Sessions