Australia will become one of the world's first markets to launch a seven-seat version of the hot-selling Tiguan crossover when the Allspace goes on sale in 2018.
Its people-carrying ability will also take the fight to the next sector favourites such as the Mazda CX-9, Toyota Kluger and Kia Sorento, and even the Skoda Kodiaq that shares much of the Allspace's platform.
Volkswagen Group Australia general manager of corporate communications Paul Pottinger said the Tiguan Allspace is expected to go on sale in Australia early in 2018.
Volkswagen is yet to discuss Australian pricing for the new crossover but it will be priced at a premium to the five-seat Tiguan that sells for $31,990 before on-road costs (Trendline 2WD) to $49,990 for the Highline AWD diesel. Rivals such as the Mazda CX-9 and Kia Sorento start at $46,490 and $40,990 respectively.
The Allspace gets its extra cabin space from a wheelbase that is 110mm longer than the latest Tiguan.
The Tiguan is 4486mm long, 1839mm wide and stands 1658mm in height with a 2681mm wheelbase, giving the Allspace a wheel to wheel dimension of 2791mm. For reference, the Toyota Kluger has a 2790mm wheelbase.
The size of the Allspace may also make buyers pitch the wagon against Volkswagen's own Touareg which also seats seven and has a wheelbase of 2893mm.
Missing from the Australian line up will be front-drive variants and manual transmissions.
But Mr Pottinger said the wagons would sell to different buyers and that there was more than sufficient space in the market for both models.
"The Toureg remains the hero car in our passenger vehicle line up," he said.
"The next-generation Touareg, which we get in 2018, will be a real tech tour de force," indicating the big SUV would move more upmarket to create a wider gap with the Allspace.
While Volkswagen has teased the debut of the Allspace at Detroit with renderings of a sporty wagon, it is believed the production model will actually share much of the styling cues of the five-seat Tiguan.
This will include the new Tiguan's clean-styled horizontal front grille, thin headlights, bold wheel arches and wrapped tail-lights.
Mr Pottinger has said the drivetrains for Australia will come from the high-output engine range, meaning the 1.4-litre turbo-petrol European entry-level engine will not make it to Australia.
The engine was deemed too small for the large AWD Allspace, so the lineup is likely to start with the 132kW/320Nm 2.0-litre turbocharged four-cylinder petrol engine and may include a 140kW/400Nm 2.0-litre diesel.
Volkswagen has said the five-seat Tiguan will have an optional 162kW/350Nm turbo-petrol engine shared with the Golf GTI and it is likely this engine will also be offered in the Allspace.
Although Volkswagen already has a large SUV in the Touareg, the German car-maker is understood to be pushing the nameplate further upmarket into the high-end SUV space.