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For 2003, when Porsche turned out the Cayenne, purists were horrified: that badge was meant only for sportscars, not SUVs. Surprisingly, the company didn't misjudge the market; even now, demand still outstrips supply.

Developed in conjunction, the Touareg is Volkswagen's version, evident both in build quality and in the unmistakable silhouette. Still, it's a somewhat tougher sell; as the company discovered with the Phaeton, it's not easy to market a pricey model with a VW badge. The Touareg has been tweaked somewhat for 2006: the stump-pulling V10 turbodiesel has been discontinued, and the 3.2-litre used in 2005 will eventually be exchanged for a 3.6-litre VR6, although the company says it's a "delayed introduction" and it could take long enough that it might be held over until the 2007 model year. The 4.2-litre V8 in my tester is a carryover from 2005, but prices have dropped $3,400 for the V8 and $4,230 for the V6 for 2006. The V6 will be a "limited availability" model until the VR6 debuts.

Named for a nomadic tribe in the Sahara, the Touareg is a luxury off-roader meant to conjure up visions of blasting across the desert. It's quite capable when it leaves the beaten path; unfortunately, its manners on the blacktop left me cold. The engine produces 310 hp and 302 lb-ft of torque, and it's powerful enough to handle the Touareg's 2404 kg (5300 lb) mass, but there's an initial throttle lag that quickly becomes tiresome. The Servotronic power steering becomes too light at lower speeds; it needs some resistance to feel more like driving and less like aiming a video game. In its favour, it has an extremely tight turning radius for its size, making it relatively easy to park.

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The Touareg comes with a six-speed automatic transmission that offers three shift modes, but none of them are ideal. In the standard Drive mode, the shifts are sluggish; in Sport mode, the downshifts are far too harsh; and while the Tiptronic manual-shift mode produces crisp gear changes, I should be using it for the driving experience, not because the other two programs aren't satisfactory. The shifts do improve considerably in Drive under hard acceleration, but with gas prices what they are, who drives that way? (And on that subject, the Touareg was also rather thirsty; although official figures average 14.5 L/100 km, my tester returned 17.4 L/100 km over the week, and premium fuel is recommended.)

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The power goes to the wheels through Volkswagen's tried-and-true 4MOTION permanent all-wheel-drive. A locking centre differential is standard, while a locking rear differential is optional, as is four-corner air suspension with damping control. Since most owners never stray off city streets, the locking centre diff would make more sense as an option as well; let the wilderness crowd beef it up, and the city folks save a few bucks and moving parts.

The Touareg takes luxury to heart; the interior is extremely well done, with quality materials, very comfortable seats, and superb fit-and-finish. If there's a glaring error, it's in a sharp, misplaced trim piece on the seat track; if you've got the seat pushed back, the edge tends to catch on your pant leg, and either falls off or rips your clothes. In Volkswagen tradition, every control is backlit, including the lock and window switches on the rear door, and the inside handles override the locks if you pull them twice, which is much more convenient than having to unlock them via the switch every time you want to exit the vehicle.

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Once you're outside, pushing a small soft-touch button on the exterior handle locks it all up, without using the remote; return to it, and the remote's proximity sensor triggers the driver's door so it's open when you get there. There are a few nanny-minders, too: the engine won't start unless your foot is on the brake, and the seatbelt warnings get very loud very fast, so there's no sitting in the driveway with the engine running and the belt unbuckled.

There are numerous touches that show attention to detail: a cancel button on the cruise control, so often missing on other vehicles; a cooled glovebox; rear window sunshades; a power sunroof that opens gradually via a rotary dial; dual sunvisors, so you can block front and side glare; an easy-to-use automatic climate control with a residual heat function that blows warm air when you're sitting with the engine turned off; and big, easy-to-use thumb wheels on the air vents, with complete closure on the centre ones. An open cubby on my tester's upper instrument panel looks unfinished, but a cover is available for it that smoothes the dash over nicely.

My tester came with a navigation system; unfortunately, the vehicle was shipped with the wrong map discs, so I never got a chance to try it out. But it does seem to be engineered backwards: the navigation discs go in the stereo head, while music CDs must be fitted into a six-disc changer located behind a panel in the rear cargo area. There's no popping in a disc for spontaneous listening, which might be possible if the navigation discs went into the rear holder. The system was also picky, playing three home-burned discs but ignoring a store-bought one.

Impressive front-seat legroom continues in the rear, where passengers enjoy equally comfortable seating. The rear seats fold, but the headrests must be removed first, which can be a chore when it comes to the middle one; with them down, the cargo area length increases from 94 cm to 165 cm. The rear hatch features a pop-up window, excellent for tossing items in, and when the hatch is pulled closed, an electric motor screws it all the way in. The cargo area includes sturdy cargo tie-downs but could benefit from some grocery bag hooks.