Volkswagen's Troubled Touareg

The Touareg SUV is as sophisticated as it is sexy. But are customers willing to pony upwards of 40 to 60 grand for a VW?

by Matt Vella

Editor's Rating:

The Good: Dead sexy, Teutonic precision and luxury

The Bad: Sky-high price for a V-Dub, no third-row seating

The Bottom Line: The right SUV in the wrong place at the wrong time from the wrong brand

Reader Reviews

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Up Front

Volkswagen's Touareg SUV is as sophisticated, sprightly, and dead sexy as its name is awkward to spell and annoying to say. But at a time when Volkswagen of America is desperately trying to reaffirm its long-lost image as a quirky and clever manufacturer of cars for the rest of us, one has to wonder what this divine, all-terrain hunk of luxury is doing sporting, of all things, a V-Dub grill.

Apparently, potential Touareg buyers started asking themselves that very same question last year. Sales of the VW SUV tanked 43.7% in 2006, down to a niche-like 10,163 vehicles, according to Automotive News. High gas prices and competition for luxury, midsize SUVs that boiled over last year didn't help those sales figures much either.

The Touareg's profile is, unfortunately, eerily similar to that of the ill-fated and much-maligned Volkswagen Phaeton. (That $70,000 luxury sedan was a technological jewel but a sales failure, and was pulled from the U.S. market in 2006.) Likewise, the Touareg is capable, refined, and technologically impressive. But one has to wonder whether senior management is paying attention—let alone sentient. The Phaeton died because Americans were unwilling to consider a Volkswagen a luxury car (despite the fact that VW also owns Audi, Bentley, and Lamborghini). What makes them think a Touareg that lists between $38,000 and $60,000 would sell any better?

The Touareg starts at $38,110 and is currently available with a choice of three engines—a 276-horsepower V6; a 350-horsepower V8 that bumps the price up to $43,100; and a monster V10 turbo-diesel that makes 310 horsepower but jacks the sticker to nearly $60,000. With that range of prices, the Touareg is spoiling for a fight with a broad swathe of luxury models from the likes of Infiniti, Mercedes-Benz, BMW, and even Porsche. Talk about punching above your brand's weight.

And yet.

I tested what some might generously consider the "economical" Touareg, with a V6 engine and minimal options. On top of the base price, my vehicle was upgraded with a $2,980 luxury package, sporting a host of goodies including power leather seats and parking assistance; a $3,350 navigation system; and $850 bi-xenon headlamps. With the $870 destination charge, the total comes to $45,840. Even now, that final tally elicits double and triple takes. Still, in practice, the Touareg is an excellent car.

Behind The Wheel

The 276 horses pumped out by the 3.2 liter V6 move the Touareg along with plenty of hustle. Despite a slow 0-to-60 time of 9.4 seconds, the engine doesn't seem to labor under the vehicle's hefty 5,000 lbs.-plus weight. (Note, too, that the car is heavier than all of its major competitors.) But, on-road, the ride experience is overall poised and supremely comfortable.

The exterior hasn't much been updated since the vehicle was introduced in 2003. Massive front fenders and elongated rear quarters make for an elegant set of lines wrapping back around the vehicle's rump. The exceptionally short front and rear overhangs are handsome and give the whole package a high-quality appearance. All in all, the Touareg has, to me, always been more attractive than its more expensive cousin, the Porsche Cayenne.

Inside, the Touareg displays a level of detail and luxury that might one day become a thing of the past if cost-cutting goes overboard. The Touareg's cabin is delightful and tastefully speckled with fine materials like high-quality leathers and wood trim. Some of the instrumentation is a bit dated compared to newer VW models including the new Rabbit (see BusinessWeek.com, 10/23/06, "VW's Rabbit Redux") and GTI, but I quite like the older, more squarish style of vents and knobs.