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Sometimes it's best to arrive fashionably late. At least that's what Audi is hoping with its new Q7, the German automaker's first, belated entry into the booming utility vehicle market. For years, the marque attempted to counter the SUV craze with an array of all-wheel-drive wagons—Quattro Avants, in Audi-speak—like the unloved allroad. With the Q7, Audi is finally giving buyers what they want. And just in time.

Hammered by high fuel prices and shifting social trends, demand for conventional sport-utility vehicles is on the wane, but crossover-utility vehicle, or CUV, sales are surging to record levels. What's the difference? Sometimes it's hard to tell. Early crossovers hoped to hide the fact that they were car-, rather than truck-based, but more recent entries, such as the Infiniti FX45, have proudly emphasized the distinctions—as has the Q7.

From its aggressive grille to its wraparound tailgate, Audi's entry is bold and handsome. At first glance, it has the muscularity of a traditional SUV, but the overall look is decidedly sleeker, even coupe-like. Around town, the Q7's slick Quattro drive train is more than a match for daily perils, from potholed parking lots to shifting snowdrifts. While it's far more sure-footed and comfortable on the highway than a conventional SUV, the Q7 sacrifices little in the way of off-road performance. And if you're the sort of owner willing to risk a $50,000 ute's paint job on the boulder-strewn Rubicon Trail, the Q7 offers an optional air-suspension system that dramatically improves comfort both on and off-road, where it can increase ride height up to 10 inches.

The Audi ute provides two power-train options—a beefy, 350-horsepower V-8 and a more fuel-miserly 3.6-liter V-6. At 16 city/20 highway, the smaller engine delivers better mileage than most comparable SUVs, though the Q7 is not going to win any awards for environmental friendliness.

Even Audi's competitors grudgingly concede that the German maker designs the best interiors on the road, and the Q7 is no exception. The cabin is elegantly finished in leather and suede, dark woods and aluminum accents. The lighting is sophisticated, the gauges well designed and controls well positioned. The front and middle-row seats are supple yet ive, and the optional back bench was more than just an afterthought.

A number of manufacturers have adopted the massive panorama sunroof in recent years. Audi goes one better with the Q7. There's the panorama for the first and second rows and an optional third-row sunroof that can tilt for improved ventilation.

Coming to the utility vehicle market so late presents Audi with some serious marketing challenges. It's going to be tough to build brand awareness. But with those discriminating buyers who add the new CUV to their shopping lists, the Q7 shouldn't be difficult to sell.

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