Volkswagen VW Touareg Hybrid

Martin Winterkorn, the new head of VW, has declared the profit margins on economy Touareg SUV hybrid models would be "far too low." A source from within the German automaker has claimed hybrid power plants would cost an extra 2,000 euros ($2590.00) per vehicle, while diesel power plants offer competitive performance at a reduced cost and with arguably the same or better mileage.

If in fact the report is correct and the VW Touareg does receive a hybrid heart, odds are the Touareg's distant cousin, the Porsche Cayenne, could get one as well. Previous reports have suggested that Cayenne is also in line for a hybrid offering.

The managerial shift over at Volkswagen HQ hasn’t managed to impede plans for the introduction of a petrol-electric hybrid vehicle from the German carmaker. However, original plans under former CEO Bernd Pischetsrieder’s rule, which besides the Touareg would have seen VW release hybrid versions of its compact class of vehicles, have been dropped. Pischetsrieder had wanted hybrid versions of the Golf, Jetta and Touran line of cars. He even announced that VW would introduce a hybrid Jetta in California by 2008.

VW’s new boss Martin Winterkorn considers the original plans as not financially sound, describing the numbers as “far too low.” A VW insider estimates the additional cost of installing a hybrid drivetrain in the Touareg is at least $2,500. This simply wouldn’t work in the price-sensitive compact segment because cheap diesel vehicles already offer equal, if not better, economy and emissions levels.

According to Winterkorn, the current market analysis is in contrast to the earlier plans of Pischetsrieder. Instead, new plans will see VW offer a hybrid version of the Touareg SUV as its first model with the fuel-saving technology according to German publication Automobilwoche. The hybrid drive train, which will be sourced from parts supplier Bosch, is also likely to feature in the all-new Porsche Cayenne, which is based on the same platform as the Touareg.

Meanwhile, Porsche boss Wendelin Wiedeking has confirmed the two companies are developing their next generation models of the Volkswagen Touareg hybrid and Cayenne with an expected launch date in 2010.