Volkswagen set some very clear goals when the Touareg came up for its second generation redesign. Smarting at negative sentiment that had brushed off from the flagship V10’s flagrant disregard of green imperatives, yet keen to bring those half a million buyers back to the fold, the need was to make the SUV acceptable again. And still desirable.

Gone are the ‘hippo’ jibes that typecast the initial 2002 model and even the 2006 facelift. Klaus Bischoff’s design team has sent the hippo off for a serious workout at the gym and it’s emerged sharper, more athletic, with a distinct shoulder line and wedged profile. Defined wheelarches and a lower, narrowing bonnet complement the new VW DNA ‘face’ with its strong chrome slat grille and chamfered front. Apart from the ‘double-L’ in the tail lights, there’s a new U-shaped signature line of LEDs in cars specified with bi-xenon front lamps. A longer wheelbase contributes to the ‘wheel in each corner’ stance, and while it still looks distinctly Touareg in line with VW’s view that residual value is protected by showing design heritage, it also looks like a very large Golf – showcasing simple, bold lines. No bad thing.

The old dictum that every new generation is more bloated than the last is reversed in the latest iteration. The engineers were tasked with combing through every single element of the body, drivetrains, suspension, engines and each ancillary in a quest to reduce weight and improve efficiency.

The results are impressive. The body is fractionally longer, wider, lower and more aerodynamic, yet the vehicle is lighter by more than 200kg and 5% stiffer. The engines have been downsized across the range yet are up to 25% more fuel efficient with lower emissions, in part due to the long gearing of the new range-wide eight-speed transmission. Then VW threw a clever parallel hybrid into the mix, which interfaces a slim 34kW electric motor/generator between the transmission and a 245kW supercharged 3.0 TSI petrol engine, good for a planet-saving 8.2ℓ/100km yet punching out a satisfying combined 580Nm. No surprise the updated Porsche Cayenne, which is built on the same platform as the Touareg and Audi Q7 at the VW Group’s plant in Bratislava, Slovakia, debuts soon with a similar system.

As expected, the interior has been thoroughly re-crafted. It’s bigger, more comfortable, more luxurious, and depending on the depth of your wallet, packed to the hilt with comfort features. The levels of refinement and combination of materials and textures are what you’d expect from a flagship model and are at least of Audi standard. The controls fall to hand and the button count is far smaller than on the Cayenne. Clever integration of functions is achieved using super-fast FlexRay buses and the simplified human interface is the (optional) 8.5inch touchscreen RNS850 with 3D satnav linked to a quality Dynaudio sound system, or you get the standard RCD550 with 6.5in screen. Steering controls are VW familiar, the three-circle instrument binnacle a fine analogue-look touch. There are standout elements. The grippy seats specifiable from manual control to all-electrical, the deep central tunnel which has lost the handbrake for an actuator switch, and the glorious panoramic sunroof (an option) which lets in loads of light yet doesn’t compromise body rigidity. Rear legroom has benefited from the longer wheelbase and the boot is now wider, so offers a useful 520ℓ or 1642ℓ when the seats (reclinable to three position and 160mm of fore/aft movement) are folded down automatically using the (optional) servo motor.

Two pieces of tech are noteworthy. One is called ‘Area View’ and gives a bird’s eye view of the vehicle’s surrounds using four 180 degree view cameras mounted on the body. Perspective is easily shifted to the front, sides or rear using a dab at the touchscreen – brilliant when edging into traffic or cresting a steep hill, showing the sides in tight parking or narrow spaces, and for accurately reversing up to a trailer. The cameras are also roped into the optional safety systems including Adaptive Cruise Control, Lane Assist and Side/Front Assist systems which regulate the car’s speed, warn of lane changes and apply the brakes when needed to avoid a collision.

VW is claiming a world first for its auto light dimming and directing device that goes by the name of Dynamic Light Assist and comes with the optional bi-xenons. It means you never blind oncoming traffic or dazzle those you drive up to as a sliver of metal proportionally masks the xenons, along with an automatic light swivelling away action, while conversely the light beam is widened as speeds increase. Clever.

VW launched its ‘all-new’ car in Florence, the home of Michelangelo and a tourist destination for the bon vivant wanting to absorb the rich accretions of Italian history. We also discovered, heading north from the Firenze region and away from the cramped confines of the insanely busy city towards the less populated farming villages near the Lago di Bilancino – close to the famous Mugello race track – that it is the home of some glorious twisting roads and great driving. The Touareg felt big on these narrow strips, and hugely modern alongside the gently decaying stone of the Tuscan homesteads, but always capable of being precisely piloted.

The Hybrid did first duty around the city centre, and its seamless shifts between silent electric only and petrol power were testimony to 15 years spent developing the system. The engineers call the clutch-based link between the two motors a ‘handshake’, though unless you are watching the flow graphic as energy shifts from braking recuperation to the battery and between the power sources, you’d hardly notice given the hushed separation in the cabin from the busyness below. As the numbers show, it’s not short on shove either.

Moving out of Firenze to Mugello we drove the 3.6-litre FSI, a natasp petrol engine that though quick and 2.8ℓ/100km more efficient, was the least well integrated with the eight-speed auto, its high rpm power peak and smaller torque buffer than the diesels meaning downshifts to lower gears, some hunting and over-long holds when accelerating. No spots on the handling though as, like the others, the double wishbones all round in addition to a three-way suspension setting (Comfort, Normal, Sport) and the additional benefit of a 60:40 rear-drive bias from the Torsen-differential based 4Motion system (dead ringer for quattro), make for excellent levels of grip and well contained body roll.

The 4.2-litre V8 turbodiesel range-topper which replaces the thirsty V10, with its huge 800Nm torque reserve (from 1750rpm), effortless 250kW power delivery and glorious soundtrack, is total overkill. It is specified with all the electrical assistants, all the high-end comforts and will have a price tag to match.

For me, the best all-rounder is the Audi-familiar V6 TDI derivative. No slouch with 176kW/550Nm in this two-tonne application, it offers a claimed fuel index of 7.4ℓ/100km. Some of this is achieved using a stop/start system and regenerative braking which swells charge to the alternator, boosting battery charge to drive ancillaries. The V6 is a pleasure to drive, with seamless shifts, plenty of urge and a relaxed approach to cruising. Crucially, it’s the only model which can be specified with the 4XMotion ‘Terrain Tech’ package, which means a proper transfer case with a 2.69 factor reduction gear, increased ground clearance and the option of a 100-litre fuel tank (85-litre standard). A rotary dial on the centre tunnel enables progressive settings to lock the centre differential, select low-range and in turn lock the rear differential. Air suspension which offers a selectable ride height of 300mm at speeds of up to 80kph is an option on this model. On an exacting off-road course it never missed a beat, clawing over obstacles requiring huge axle articulation with no damage except to the horizon.

From September SA gets the petrol and two diesels. The hybrid is scheduled for later in 2011. How the cars are specced by VWSA and what options will be available from the myriad choices on offer is still being finalised. Price and package will have to be closely benchmarked to the current mid-size SUV leaders in the Discovery 4, Prado and perhaps even X5. New Touareg is massively capable, the engines promise enticingly low fuel needs, and in 4xMotion form it very capably bridges the on-off road divide. The hippo has donned a suit.