BEIJING – Volkswagen bills its new Touareg as “the biggest leap forward in the history of the SUV” as it strives to position it farther up-market from its 7-year-old predecessor in a segment traditionally dominated by the likes of the BMW X5, Mercedes-Benz GLE and Volvo XC90.

The third-generation model, unveiled at a media presentation here, has been comprehensively redesigned and re-engineered for 2018. However, Volkswagen’s ongoing realignment of its North American operations, with a greater emphasis on volume segments with new models such as the 7-seat Atlas, means the 5-seat Touareg no longer will be sold in the U.S.

Together with technological features that VW says serve to make the new Touareg its most advanced series-production model yet, it also is claimed to offer a more on-road-focused character in line with studies that reveal customers rarely head off-road.

This is reflected in its exterior styling, advanced new chassis featuring 4-wheel steering and a first-ever anti-roll system, as well a new interior that debuts the German automaker’s new Innovision Cockpit control system featuring a curved 15-in. (38-cm) touchscreen display.

“It sets a benchmark at the top of the automotive world,” VW Chairman Herbert Diess says at the launch of the new Touareg. “It shows what Volkswagen can do in terms of design, technology and innovation.”

The more up-market positioning for the new model, which is planned to go on sale later this year in China and other markets, including Europe, comes as the high-riding 5-seat SUV succeeds the discontinued Phaeton at the very top of the VW lineup with larger dimensions, more room, new connectivity solutions and added luxury features.

Significantly, the ʼ18-model-year Touareg is the first to be developed with a clear focus on China, which in recent years has become its largest market in terms of sales volume on the back of rapid growth of SUV models of all sizes.

According to Diess, the SUV segment accounted for just 8% of the Chinese market in 2007. Ten years later, it accounted for 45% of all car sales there. “Nowhere in the world have we seen such explosive growth in SUV demand” as in China, he tells WardsAuto.

A sister model to the Audi Q7, Bentley Bentagya, Lamborghini Urus and Porsche Cayenne – alongside which the new Touareg is being assembled at VW’s SUV plant in Bratislava, Slovakia – it is among 19 SUV models the automaker plans for sale by the end of 2020.