WHEN THE '12 VOLKSWAGEN TIGUAN cross/utility vehicle goes on sale in the U.S. in September, it will offer more competitive pricing, an estimated 15% better fuel economy on the highway and slightly freshened sheet metal.

These improvements, coupled with the CUV's taut handling and upscale interior, should give the Tiguan a sales and market-share boost in Ward's ultra-competitive Middle CUV segment.

But after two days of autobahn and mountain driving in Austria and Germany, it's clear this slightly freshened Tiguan is not a game changer in the mold of its new Jetta and Passat siblings.

Overall, VW's U.S. sales are up 22% year-to-date. Jetta deliveries jumped 81% through June, and it is on pace for record sales this year.

A clever advertising campaign that features a frustrated child unable to crack open a Tiguan-shaped piñata has raised awareness for the '11 model and helped boost sales. But it's unlikely the CUV can maintain that level of momentum.

The Tiguan is too pricey, too small and too far off consumers' radar to break out of its niche status and pose a serious threat to key competitors such as the Honda CR-V and Toyota RAV4.

VW officials targeted 25,000 annual sales at Tiguan's U.S. launch in 2008, but so far 2010 was its best year, logging 20,926 units. Honda delivered 90,864 CR-Vs through June, while VW sold 14,031 Tiguans during the same period, according to Ward's data.

The real threat from the Tiguan likely will come a few years down the road. VW is rumored to be shifting Tiguan production from Wolfsburg, Germany, to its new plant in Chattanooga, TN. The auto maker reportedly is planning a new-generation vehicle along the lines of the redesigned Jetta and Passat: larger, less pricey and with wider appeal.

The Jetta and Passat got major makeovers and big price cuts this year that give them stronger positions in their segments. The new Jetta is substantially larger and its base price was chopped $1,740. The sticker of the new, bigger Passat was slashed a whopping $7,000.

A bigger, less-expensive Tiguan, backed by VW's ambitious plans to sell 800,000 vehicles in the U.S. by 2018, could upset the status quo in the middle CUV segment.

But the Tiguan is not ready for a major redesign. It is in the middle of a 7-year product cycle and receives only a minor facelift for '12.

It gets a new 2-bar grille in front, while upmarket SEL versions feature light-emitting diode running lights. New taillights, a couple of chrome strips and new wheels round out the exterior facelift.

Inside, the '12 Tiguan has a new steering wheel and shifter, new bezels around the front air vents and new trim pieces.

The biggest news is the CUV's hefty fuel-economy increase. The '11 front-wheel-drive Tiguan with a 6-speed automatic is rated at 18/26 mpg (13-9 L/100 km) city/highway.

VW officials say the '12 model will achieve a 15% improvement on the highway, up to 29 mpg (8.1 L/100 km), which will make it more competitive with rivals. The '11 Honda CR-V, for instance, is rated at 21/28 mpg (11-8.4 L/100 km). However, official Environmental Protection Agency numbers are not yet available on the new Tiguan.

In an impressive cost-control move, VW is achieving this gain without expensive powertrain changes.

Instead, Product Specialist John Ryan says the 6-speed automatic transmission is being equipped with two overdrive gears, instead of one; transmission shift points are being reduced from 1,200-1,300 rpm to 1,000; the torque converter now decouples when coasting; idle speed is reduced to 600 rpm; and low rolling-resistance tires are being installed.

Even so, unless the Tiguan receives a big price cut like the new Jetta, it will continue to stand out as one the most-expensive vehicles in the segment. The base '11 Tiguan is priced at $24,305, almost $2,000 more than the CR-V.

Ryan says the '12 model pricing will be more competitive when announced later this year, but he declines to be specific.

The Tiguan has been a homerun for VW in Germany and most of its key foreign markets since its 2007 introduction.

But in most markets outside the U.S., the Tiguan is viewed as a small luxury SUV. It is offered with a wide array of features, including seven different engines; numerous gearbox options including a 7-speed dual-clutch transmission; and sophisticated electronic safety features, such as a fatigue warning system.

In the U.S., the Tiguan's relatively small dimensions pit it against an army of 23 budget-priced family haulers, where the CR-V, Ford Escape and Chevrolet Equinox are the highest-volume players.

Ryan confirms VW's superb 2.0L DOHC I-4 turbodiesel, available on both the new Jetta and Passat, will not be an option on the Tiguan in the U.S., at least not for the coming model year.

Touting 140 hp and 236 lb.-ft (320 Nm) of torque, the diesel has been a Ward's 10 Best Engines award winner for three years running and is the perfect engine for the Tiguan, providing lots of low-end grunt and long range.

But Ryan says because the Tiguan is a bigger, heavier vehicle, the diesel option in the U.S. would require a selective catalytic reduction emissions control system that would add too much cost.

Even so, VW has not ruled out offering a diesel option in future model years.

Instead, the 2.0L turbocharged TSI remains the only engine available. Producing 200 hp, it is among the best engines in the segment, despite its preference for premium fuel.

A 6-speed manual or conventional 6-speed automatic transmission are available in front-wheel-drive or all-wheel-drive configurations.

A full U.S.-specification Tiguan was not available in Europe for testing, so we have to postpone a complete review of the impact of the engine and transmission tweaks for later this year.

PROS/CONS

+

  • 2.0L I-4 superb
  • Taut handling
  • Improved mpg

-

  • No diesel option
  • Gas engine prefers premium
  • Pricing still issue

'12 VW Tiguan

Vehicle type: Front-engine, FWD, 5-passenger CUV

Engine: 2.0L TSI DOHC I-4; iron block/aluminum head

Transmission: 6-speed automatic

Power: 200 hp @ 5,100 rpm

Torque: 207 lb.-ft. (280 Nm) @ 1,800-5,000 rpm

Wheelbase: 102.5 ins. (260 cm)

Compression ratio: 9.6:1

Overall length: 174.3 ins. (443 cm)

Base Price: TBA

EPA fuel economy: (estimated) 18/29 mpg (13-8.1 L/100 km)

Competition: Honda CR-V, Toyota RAV4, Ford Escape, Chevy Equinox, Subaru Forester