Volkswagen will become the latest manufacturer to enter the SUV sector when the Touareg goes on sale next summer.

The company claims the Touareg straddles the on/off-road market in direct competition to the BMW X5, Mercedes M-class and Volvo XC90. Executives call it a “high-end off-road vehicle” which offers “excellent off-road characteristics with the comfort of a luxury sedan and the handing of a sports car for street driving”.

Although nicely proportioned and clearly offering all the quality benefits of VW ownership, the Touareg's design is a little bland. Because it was developed alongside the Porsche version - the Cayenne - British onlookers question whether it will be too upmarket and expensive.

“This is the third phase of VW's luxury-class product offensive,” says the company. “The Touareg also comes in 3.2-litre V6 at reduced prices compared with the 5.0-litre V10.”

The Touareg is expected to start at around £30,000 for the V6, rising to nearly £60,000 for the range-topping 5.0-litre which promises to pump out 313bhp, making it the world's most powerful SUV.

Company sources suggest VW will also make a second, smaller sports utility vehicle.