Touareg 2

VW sees the 2008 update as an opportunity to reinvigorate Touareg sales, to build upon the SUV's halo power, and to sustain the momentum it claims to have gained in quality.

The strategy ranges from simplifying Touareg's options list, to promoting its off-road prowess, to paying millions to insert it into the blockbuster film, The Bourne Ultimatum. The agenda does not include drastic changes to the vehicle itself.

Dimensions are unaltered from the 2004-2007 version, and Touareg remains a five-passenger midsize SUV. It retains a three-model lineup built around its V6, V8, and diesel V10 engine choices. And although headlamps, grille, and taillamps are new, only by parking one next to its predecessor can the 2008 model be easily identified.

2008 Volkwagen Touareg
Outside, Touareg got new headlamps, grille, and taillamps for 2008.

Nonetheless, VW labels the 2008 model the Touareg 2, and says changes that have been made are strategically crafted.

For example, VW dealers found themselves selling Touaregs at a loss to seal deals on vehicles festooned with options buyers didn't want, said Steve Neder, head of launch and product management for Volkswagen of America. So the 1,536 possible combinations of options available on the original Touareg have been reduced to just 208.

At the same time, Touareg 2's standard equipment list has been beefed up. Premium-SUV shoppers expect lots of amenities included in the base price, so now standard on all models are such items as front- and rear-obstacle detection, a power tailgate, and power driver's seat. That last feature is an example of a surprise deal-breaker. "People would walk away from this vehicle because it didn't have a power driver's seat standard," Neder said.

Touareg's engines hadn't come under serious criticism, but the V6 and V8 are upgraded with the addition of direct fuel injection. The technology improves engine efficiency though exacting control of the fuel-air mixture.

Both engines gain 40 horsepower for 2008, the V6 to 280, the V8 to 350. VW says they're faster with little or no change to EPA fuel-economy estimates. It says the V6 model does 0-60 mph in 8.3 seconds, down from 9.4; EPA ratings stay around 16 mpg city and 20 highway. The V8 does 0-60 in a claimed 7.1 seconds, down from 7.6; EPA ratings remain around 14/19. (VW says the unchanged V10 diesel does 0-60 in 7.5 seconds and rates 15/20.)

The V6 model, which starts at $39,320 and tops out at $54,120 fully equipped, is expected to continue to account for about 70 percent of Touareg sales. The V8 has a price spread of $48,320-$59,020. Its share of Touareg sales slumped to 16 percent in 2007 from 29 percent in 2006. Meanwhile, the V10, with a spread of $68,320-$76,270, increased its share from 3 percent to 14 percent.

Expanding the diesel's penetration is part of VW's plan for Touareg, though huge gains will have to wait until calendar 2009 and the arrival of a new diesel engine with emissions low enough to be sold in all 50 states; the current V10 Touareg can't be sold in California and parts of New England.

Off-Road Prowess

If the diesel's prodigious 553 pound-feet of torque and ability to go more than 500 miles on a tank of fuel are among this SUV's hidden assets, so too is the off-road capability built into every Touareg.

2008 Volkswagen Touareg
Volkswagen created the Touareg Adventure program, in which $2,000
buys two days of instruction, lavish meals, resort lodging, and driving in
the off-road mecca of Moab, Utah.

Off-road ability was near the bottom of purchase reasons cited by Touareg buyers, listed by just two percent of them. Nevertheless, VW is working to boost the SUV's go-anywhere image, and not just to attract more off-road oriented buyers. It believes it's a way to promote Touareg as dependable and fun.

Factory-sponsored Touaregs compete in the world's toughest off-road races. And the company has created the Touareg Adventure program, in which $2,000 buys two days of instruction, lavish meals, resort lodging, and driving in the off-road mecca of Moab, Utah. VW is encouraging its salespeople to attend, hoping the kick of coaxing Touareg over Moab's otherworldly terrain translates into enthusiasm for the product.

"A customer feels that vibe when they come in," said VW spokesman Steve Keys. "Unfortunately, with a lot of salespeople who haven't had this experience, the deal is all about the price."

Star Power

What's the price of landing Touareg a role as the bad guys' ride in this summer's big-screen blockbuster? About $40 million, says VW. Touareg's placement in The Bourne Ultimatum is part of a global, three-year, cross-promotional accord between VW and Universal Studios.

Exposure for the Touareg in the movie and its theatrical trailers is just part of the deal. The automaker gets rights to VW-branded DVDs of the first two Bourne films and Web site tie-ins that include ticket giveaways, a Bourne-related contest, and shared Internet links.

That Internet connection is crucial to VW's overall marketing plan, said Price, the PR manager. VW has benefited from Web-savvy shoppers more than most car companies, he said. Volkswagen ranks behind only BMW's Mini brand in the number of visits to its official site that result in actual vehicle sales, Price said. "The Web site is really the hub" for reaching VW intenders, he said, and the Bourne deal is crafted to direct prospects to VW.com.