Land Rover announces a series of improvements, both mechanical and aesthetic, for its flagship Range Rover SUV for the ’07 model year.

“The two biggest changes are a new interior and the addition of the Terrain Response system,” Range Rover Brand Manager John Landre tells Ward’s. “The interior was upgraded and revised. There’s more storage capacity, more luxury, more wood. You name it, across the board we touched it.”

The Terrain Response system, Landre says, is the most significant upgrade, however. The system allows the driver to choose different settings for optimum performance on a variety of terrains.

By maneuvering a rotary switch on the dash, drivers can select one of five settings: general driving; grass/gravel/snow (for slippery conditions on and off road); sand; mud and ruts; and rock crawl.

Once the mode is chosen, software and hardware settings automatically are selected for the engine, transmission, brakes, stability control system and suspension.

The system is exclusive to Land Rover – “at least for the ’07 model year,” Landre says.

The ’07 Range Rover will be available with either a 400-hp supercharged V-8 or a naturally aspirated 305-hp V-8. The auto maker has not said whether it will make its twin-turbo V-8 diesel, which will be offered in European Range Rovers, available in the U.S.

The ’07 model also receives a new airbag layout designed to maximize usable cabin space, a cleaner-styled center console, an electronic parking brake and an upgraded heating-ventilation-air conditioning system.

Landre tells Ward’s the mechanical and interior upgrades are part of Land Rover’s overall strategy to balance luxury and off-road functionality in its product lineup. Although Land Rover is marketed as a luxury brand, it still stays true to its roots as one of the most capable off-road vehicles on the market, Landre says, adding that off-road functionality remains a key selling point.

The Strategic Vision 2005 New Vehicle Experience Study backs Landre’s claims. According to the study, 34% of Land Rover owners use their vehicle’s off-road capability for recreation, 7% use it for business and 36% use it for both pleasure and business.

“People talk internally that we build tri-athletes – on-road, off-road and luxury,” Landre says. “But we always want to be class leading off-road. It’s our intent never to lose that.”

bpope@wardsauto.com