If someone were to suggest a while back that Volkswagen would soon be producing a Mercedes-Benz S-Class-caliber luxury sedan and a Range Rover-challenging sport/utility vehicle, he might not have been taken seriously.

Volkswagen became one of Europe's leading industrial operations by producing millions of popularly priced, high-quality products for the masses. Volkswagens weren't cars you aspired to; they were what you drove until you could pony up the coin for the German car you really wanted: a BMW, Mercedes, or Porsche.

That was then. This is now.

For its part, the new Touareg (say tour-egg) fits right in among its luxury-SUV competitors, within a few inches of wheelbase, length, width, and height of the BMW X5, Mercedes-Benz M-Class, Volvo XC90, Toyota Land Cruiser/Lexus LX 470, and Range Rover. In a world filled with SUVs, why should buyers give the Touareg a second look? Well, this Volkswagen presents an interesting mix of attributes: velvety engines, stunning interiors borrowed from the car side of the ledger, and serious four-wheel drive and suspension underpinnings emanating from the truck side. Best of all, feature for feature, the Touareg is less costly than its esteemed German competitors.

One of the ways Volkswagen beat the bean counters was by sharing the design and development costs of the Touareg's basic structure with the Porsche Cayenne SUV. Arguably, if you had to team up with a car company to produce a new, high-quality product, you could do far worse than pick Porsche, which has enjoyed longstanding success engineering and developing vehicles for a substantial number of other automakers.

Cartoonish name notwithstanding, the Touareg is a solid extension of the VW line. Designers saw no need to shock buyers into noticing the new Vee Dub, a la Aztek, Element, or Hummer H2. The Touareg's design is refreshingly free of tomfoolery. It has the Volkswagen "corporate" face, not unlike a taller version of the Passat or upcoming Phaeton, with proportions akin to BMW's SUV. And Passat-like looks seem a wise choice: If the Passat were a car company, it would outsell Audi or Infiniti in the U.S.