When you think of luxury brands, Volkswagen probably doesn't produce much of a blip on your radar. The 2012 Volkswagen Touareg, however, might change your mind. With a range of powerful engines, a driving feel that instills confidence and an interior that rivals those of its German brethren, the Touareg might just have you saying, "This is a Volkswagen?" Considering that the Touareg shares some of its underbody structure with the more upmarket Porsche Cayenne, perhaps its ability to fight above its weight class should come as no surprise.

Like other luxury SUVs, the 2012 Volkswagen Touareg provides a variety of choices for prospective buyers. Under the hood, you can choose between a plenty-capable gasoline V6 engine, a burly yet economical TDI diesel or a Hybrid model that delivers on its promise of V8-like performance with V6 fuel economy.

On the inside, even base-model VW Touaregs have cabins that are on par with those from established luxury makes like BMW and Lexus. There's an abundance of rich wood, metallic accents and high-quality materials; you'll also find lots of up-to-date electronics and entertainment features. However, there's no third-row seating, and cargo capacity is middling at best.

To the Touareg's credit, it holds its ground, despite competing with a very impressive group of rivals. Of course, if you must have a vehicle with a luxury badge, you'll probably want to check out the BMW X5 and the redesigned Mercedes-Benz M-Class. Both offer diesel engine options, just like the Touareg. On the hybrid front, the Lexus RX450h is a notable bargain when you consider the Touareg Hybrid's $60,000 price tag. Thankfully for anyone shopping this segment, there's really no loser in the bunch.

The 2012 Volkswagen Touareg is a five-passenger midsize SUV that's available in four main trim levels: Sport, Lux, Executive and Hybrid. All but the Hybrid can be had with either gasoline V6 ("VR6") or turbodiesel ("TDI") V6 power.

The Sport comes well-equipped with 18-inch wheels, bi-xenon headlights, foglights, roof rails, a power liftgate, cruise control, dual-zone automatic climate control, eight-way power/heated front seats, leatherette upholstery, Bluetooth and an eight-speaker sound system with touchscreen control, a six-CD changer, satellite radio and iPod integration. Adding the optional navigation system also includes a rearview camera.

The Lux has all of the above equipment plus 19-inch wheels, a panoramic sunroof, heated sideview mirrors, walnut cabin accents, leather upholstery, 12-way power front seats (with power lumbar support for the driver), driver memory presets and power rear seat releases in the trunk. Moving up to the Executive adds 20-inch wheels, a heated steering wheel, heated rear seats, keyless ignition/entry and a Dynaudio premium sound system.

The Hybrid comes loaded with all the aforementioned along with a power-adjustable steering column, rear parking sensors, passenger-seat memory presets, passenger power lumbar seat support and metal door-sill plates.

Options are few and include a Towing package, carpeted floor mats and the Protection package (which consists of rubber floor mats, a rubber cargo area mat and mud guards).

An eight-speed automatic transmission and all-wheel drive are standard on every 2012 Volkswagen Touareg. The VR6 versions have a 3.6-liter gasoline V6 that makes 280 horsepower and 265 pound-feet of torque. The TDI versions feature a 3.0-liter turbodiesel V6 good for 225 hp and a prodigious 406 lb-ft of torque. The Hybrid features a supercharged, direct-injection 3.0-liter V6 gasoline engine paired with an electric motor. The two combine to generate an impressive 380 hp and 428 lb-ft of torque, enough to catapult this Touareg from a standstill to 60 mph in just 5.8 seconds, according to Edmunds testing.

EPA fuel economy estimates for the VR6 stand at 16 mpg city/23 mpg highway and 19 mpg combined, while the TDI is rated at an impressive 19/28/22 mpg. The Hybrid, which is tuned more for performance than maximum economy, rates only slightly lower than the TDI at 20/24/21.

Properly equipped, the Touareg (any trim level) can tow 7,700 pounds, which is more than most competitors.

All 2012 Volkswagen Touaregs come standard with antilock disc brakes, stability and traction control, hill-hold assist, front-seat side airbags and full-length side curtain airbags.

In recent Edmunds brake testing, the Touareg Hybrid came to a stop from 60 mph in an admirable 121 feet. In crash tests conducted by the Insurance Institute for Highway Safety, the Touareg earned a top score of "Good" in frontal-offset, side-impact and roof strength tests.

Despite lacking a low-range transmission for off-road excursions, the 2012 Volkswagen Touareg provides a fair amount of trail prowess thanks to its minimal front/rear overhangs, decent ground clearance and compliant suspension. But even if you never venture off the beaten path, it is still quite satisfying to drive. Steering response is particularly sharp, though the effort level is perhaps too light for some tastes.

The VR6 engine is refined and adequately powerful, but the V6 TDI diesel is well worth the extra cash, providing superior torque and fuel economy. The Hybrid is impressively quick while returning good fuel economy, though its $60K price tag will likely scare some off. Regardless of engine choice, the eight-speed automatic transmission's shifts are barely noticeable. At highway speeds, the Touareg feels planted and confident, while cosseting its passengers in a cocoon of quiet luxury.

The Touareg's handling and ride dynamics are similarly refined, with a solid, composed feel in the corners and over the bumps. Though the brake pedal feels somewhat mushy with its long stroke, under hard braking, the brakes themselves are powerful enough.

While Volkswagen is rarely considered a player in the luxury market, the 2012 Touareg's interior transcends its badge to compare favorably to pricier SUVs. Most surfaces in the Touareg's interior are soft-touch, and the hard surfaces feel smooth and substantial. The navigation system boasts crisp graphics and an intuitive touchscreen interface. At higher trim levels the Touareg further impresses with the powerful Dynaudio stereo, upgraded styling cues and interior materials.

While some other midsize SUVs offer a third-row seat, the Touareg does not, limiting passenger capacity to only five. However, the second row is roomy enough, with a higher seat cushion than you'll find in the BMW X5. Cargo capacity is 32 cubic feet with the rear seats up and 71 cubic feet with them stowed.