KITZBUEHEL, Austria – 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 the ultra-competitive Ward’s Middle CUV segment.

But after two days of driving in Austria and Germany on everything from the autobahn to remote mountain roads, 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 20% year-to-date and 28% for the month of May. Deliveries of the new Jetta jumped 62% through May, and it is on pace for a record sales year.

A clever advertising campaign that features a frustrated child unable to crack open a Tiguan-shaped piñata See Youtube Video Here has raised awareness of the current ’11 model, rocketing sales 71% in May. But it’s unlikely the CUV will be able to 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, Toyota RAV4 and Subaru Forester.

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 77,074 CR-Vs through May, while VW sold 11,563 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 VW Jetta and Passat sedans got major makeovers and big price cuts this year that give them much stronger positions in their respective segments. The new Jetta is substantially larger and its base price was chopped $1,740. The new Passat also is bigger, and its sticker was slashed a whopping $7,000.

Critics lambasted the moves, complaining VW is cheapening its interiors and homogenizing its designs, but the strategy appears to be working. Jetta sales are on fire, and the Passat appears poised for big gains as well.

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 some 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 the least thirsty competitors in the segment. The ’11Honda CR-V, for instance, is rated at 21/28 mpg (11/8.4 L/100 km), city/highway. However, official Environmental Protection Agency numbers are not yet available on the new Tiguan.

’12 VW Tiguan
Vehicle type Front-engine, FWD, 5-passenger CUV
Engine 2.0L TSI DOHC I-4; iron block/aluminum head
Power (SAE net) 200 hp @ 5,100 rpm
Torque 207 lb.-ft. (280 Nm) @ 1,800-5,000 rpm
Compression ratio 9.6:1
Transmission 6-speed automatic
Wheelbase 102.5 ins. (260 cm)
Overall length 174.3 ins. (443 cm)
Overall width 71.2 ins. (181 cm)
Overall height 67 ins. (170 cm)
Base price TBA
Fuel economy (estimated) 18/29 mpg (13-8.1 L/100 km)
Competition Honda CR-V, Toyota RAV4, Ford Escape, Chevy Equinox, Subaru Forester
Pros Cons
2.0L I-4 superb No diesel option
Taut handling Gas engine prefers premium
Improved mpg Pricing still issue

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

Instead, Tiguan Product Specialist John Ryan says the automatic 6-speed 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 energy efficient daytime running lights 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 it was introduced in 2007. Last year, it held 21% of the compact SUV market in Germany and 12% across Europe.

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; two different front-end designs; 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.

“Our biggest problem in the U.S. is simply not showing up on shopping lists,” Ryan says.

He 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, excellent fuel economy 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. The Jetta does not require an SCR system, although the Passat does.

Even so, VW has not ruled out offering a diesel option in future model years. In Europe, a FWD Tiguan achieves combined city/highway fuel economy as high as 44 mpg (5.3L/100 km) with the auto maker’s most efficient turbodiesel equipped with a stop/start system.

Instead, VW’s 2.0L turbocharged TSI remains the only engine available. Producing 200 hp and 207 lb.-ft. (281 Nm) of torque, it is among the best engines in the segment. But its preference for premium fuel puts it at a disadvantage in this budget-sensitive sector.

A 6-speed manual or conventional 6-speed automatic transmission are available in front-wheel-drive or all-wheel-drive configurations. A dual-clutch transmission is not offered in the U.S.

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.