BARCELONA, Spain – Perched on a narrow, rocky trail atop a steep cliff, teetering precariously on two wheels, Volkswagen AG’s new ’08 Touareg 2 cross/utility vehicle could not be any further removed from the smooth boulevards of suburbia that will pass beneath its wheels for most of its life.

But the Touareg has infused the market with multiple personalities since its introduction in 2003, coddling occupants with luxurious interior appointments, while maintaining the off-road dexterity of a mountain goat.

On the surface, much is the same for the revised-for-’08 CUV, with only the prominent chrome grille and updated bumpers appearing unique at first glance. Other notables include new headlight and taillights, four new colors and a revised rear spoiler for improved aerodynamics.

However, beneath its metallic skin, a raft of updates brings the Touareg 2 up to par with many of its competitors and showcases the brand’s latest developments in styling, electronics and powertrains.

For ’08, all Touareg 2s sport new seats and a redesigned instrument panel with a larger infotainment display, along with standard power liftgate, sonar parking assistance and advanced climate-control systems.

The warm, rusty hue of the new Sienna leather interior color further improves the ambiance of the cabin and contrasts nicely with the various woodgrain and metallic finishes.

Motivation for the CUV falls to a pair of direct-gasoline injection FSI mills (the 3.6L narrow-angle VR6 and 4.2L V-8) ranging from 280-350 hp, the latter providing ample thrust and a throaty exhaust note out of the revised dual exhaust tips.

The stump-pulling 5.0L V-10 TDI turbodiesel and its 553-lb.-ft. (750 Nm) of torque is offered, as well, but will fall by the wayside once the 3.0L V-6 TDI is introduced in the U.S. later next year, David Goggins, director-marketing and product strategy, says, noting the 3.0L TDI model will be priced more as an alternative to the V-8 model (less than $50,000), rather than the exorbitant $70,000 asking price of the V-10 TDI.

All models are outfitted with 6-speed automatic transmissions and advanced full-time 4-wheel-drive systems, complete with low-range capability, hill-descent control and optional rear differential locks.

On the craggy mountain slopes here, overlooking the historic Montserrat monastery, the Touareg 2 proves equally at home scuffing its skidplates as it is schlepping groceries from the local corner store.

The long-travel air suspension, which can be raised or lowered significantly on demand, absorbs rain ruts with little drama and allows the truck to articulate its 4-wheel independent suspension over boulders that likely would cripple lesser machines.

Of note is the CUV’s ability to tackle such daunting obstacles on its 19-in. alloy wheels and street tires, which are standard fare with the V-8 and V-10 (V-6 models feature 17-in. alloys as standard).

Aiding control are a slew of new electronic stability control and antilock braking acronyms working in cahoots to prevent rollovers and improve stopping performance.

Also new is ABSplus, which the auto maker claims improves braking performance 20% on loose surfaces (gravel, sand and snow) by initially locking up the wheels in order to build up a wedge of material, similar to a snowplow.

'08 Volkswagen Touareg 2 V-8 FSI
Vehicle type Front-engine, 4-wheel drive, 5-passenger, cross/utility vehicle
Engine 4.2L (4,172 cc) DOHC V-8, cast iron block/aluminum heads
Power (SAE net) 350 hp @ 6,500 rpm
Torque 325 lb.-ft. (441 Nm) @ 3,500 rpm
Compression ratio 11.0:1
Bore x stroke (mm) 85 x 93
Transmission 6-speed automatic
Wheelbase 112.4 ins. (286 cm)
Overall length 187.2ns. (475 cm)
Overall width 75.9 (193 cm)
Overall height 68.0 ins. (173 cm)
Curb weight 5,300 lbs. (2,404 kg)
Base price range $39,320-$68,320
EPA fuel economy, city/highway (mpg) 12/17
Market competition Jeep Grand Cherokee, Lexus GX 470, Mercedes-Benz ML-Class, Porsche Cayenne

With the chassis and drivetrain toggled back to street trim, the Touareg 2 handles twisty mountain switchbacks surprisingly well – for an off-road vehicle – while the supple tuning of the air suspension helps dispatch monotonous stretches of motorway without notice.

After a full day of brutal exploration, the new Touareg 2 proves to be a willing and able performer both on-road and off, with the only casualties being a dinged rocker panel and a punctured 19-in. street tire from a close encounter with a sharp rock.

Sales of the new model begin this month in the U.S., Goggins says, noting the number of build combinations has been simplified from 1,536 in ’07 to 208 in ’08.

A towing package (7,716 lb. [3,500 kg] maximum) and adjustable air suspension (conventional steel springs are standard) are the major standalone options, with other upgrades, such as active xenon headlights, 620-watt Dynaudio sound system and adaptive cruise control, organized into just three main trim packages: Lux, Lux Plus and Technology.

Regardless if most Touareg 2s never venture past the confines of the urban jungle, VW has not hampered its flagship’s ability to handle whatever is thrown at it.