It used to be the number of performance SUVs could be counted on three fingers, with the X5 4.6is and Mercedes-Benz's M and G-Class AMG models making up the entire segment. Now, Porsche, Volkswagen, Infiniti, and others are joining the party.

BMW's midlife update for the X5 is a good response: more horsepower, better fuel economy, six forward-gear ratios, smarter traction management, and some interesting load-carrying options.

Although the engine is the same size as the previous 4.4-liter V-8, the new version includes updated variable cam timing and variable-length air-intake runners for better response. The obvious benefits are 25 more horsepower and an almost 15-percent improvement in EPA fuel economy numbers (from 14/18 to 16/22). The overall feel of the 4900-pound X5 is noticeably lighter than the previous setup.

Another significant upgrade is in the relatively transparent technology of the new AWD system. Utilizing an electronically controlled wet-clutch and several yaw, speed, and steering sensors, it has more intelligence, which helps it more accurately assess where the proper amounts of torque need to be applied. The system now (almost) seamlessly adjusts braking or power shutdown during understeer or oversteer situations.

The X5 will continue to be offered with the base 3.0-liter I-6 engine, backed by a six-speed manual or five-speed Steptronic automatic trans. The new six-speed automatic is standard on V-8 models. For those looking for more horsepower, a new high-output 4.8-liter Valvetronic V-8 will be out in late summer--packing close to 400 horsepower.