It's a year before it's due in Australia, but Volkswagen's baby Touareg - the Tiguan has the European crowd cooing.

Volkswagen leveraged its small car line-up using components from a range of models to develop the Tiguan, which is essentially a Golf sport utility vehicle.

Targeting the likes of Toyota's RAV4 and other compact sports utility vehicles from Japan and Europe, Tiguan is expected to be priced competitively when it arrives next year. Reading between the lines, that means the range will probably start about the mid-$30,000 mark rising to just under $50,000.

It is a handsome beast that should appeal to male and female buyers, especially when they drive it. Tiguan features Volkswagen's all-wheel drive 4motion system that varies power to each wheel according to traction.

A choice of transmissions is a six-speed manual and a six-speed auto.

Stability Control is standard across the range.

Three variants are offered; the Track and Field, with a chamfered nose for ground clearance and tougher off-road credentials with a button that sets many vehicle functions for off-road driving. Then there are the Trend and Fun models for urban sport and style.

Multiple grades of each model will be offered in Europe. We will get a simplified model range in Australia.

Power comes from a direct injection, 1.4-litre, TSi petrol four-cylinder with supercharging and turbocharging. The diesel is a 2.0-litre. A 2.0-litre turbo petrol engine from Golf GTI is also on the cards. Power outputs range from 110kW to 147kW, following the engine line-up available in the Golf.

Tiguan is a practical vehicle offering a cleverly designed interior and exterior. The rear seats slide forward, back and flat with numerous storage compartments. Interior styling is generic with a dash of flash particularly around the door liners and centre control screen, if fitted.

A glass sunroof is available and opens much of the roof to the outside. Volkswagen has also developed a swing-out 2.5-tonne capacity towing hitch that tucks up under the rear bumper.

Park assist on the Tiguan will virtually park the vehicle without driver assistance. We may get the system in Australia if VW gives it the 'ok' and if it passes our laws.

Made in Germany, Tiguan's build quality is plain to see. The interior is among the best put together irrespective of price and the exterior finish is of a high standard.

On-road performance is impressive, particularly in the diesel. Performance is brisk and there is never a call for more power in normal driving situations. Vehicle dynamics are surprisingly sporty for a compact sports utility. It sits on the road like a Golf and will satisfy a keen driver in the curves.

Noise intrusion is minimal and the roomy interior is comfortable and functional.

Volkswagen's engines comply with the forthcoming Euro 5 regulations, meaning they have a low environmental impact.

Tiguan is a good size; not too big, not too small. It has a decent load space and is easy to access through good-sized doors. It is surprisingly competent in medium off-road driving.

About the only source for complaint on the European specification cars we drove last week in Hungary was the absence of a spare wheel. The Tiguan is being fitted with a tyre reinflation kit.