No photography was allowed inside VW's closely guarded studio, but the sheet metal of each vehicle on display clearly indicated that VW is entering a new phase of more expressive design, a break from the more conservative look of the U.S. Passat and Jetta.

In addition to the new midsize crossover, VW showed final production versions of the redesigned Tiguan compact crossover arriving stateside in 2017 and the freshened Passat due out later this year.

Bischoff says VW needed to step up its design game to stand out in the U.S., where the brand's 2 percent market share pales compared with the double-digit shares it holds in Europe, China and other major markets.

Since Martin Winterkorn took the helm as CEO of Volkswagen AG in 2007, Bischoff says, VW has adopted a more market-specific approach to design, with more consumer clinics and feedback from dealers in overseas markets during the design process.

For example, designers were sent back to the drawing board after feedback from U.S. consumer clinics indicated that the front face of the midsize crossover needed to be more sheared and imposing than the downward-sloping front end on an early iteration of the vehicle, Bischoff said.

"The competition is brutal, and we are not allowed to bring cars into production that do not win clinic testing," Bischoff said. "This car has to be the best."

VW is aiming two more crossovers at the U.S. in coming years: a long-wheelbase version of its redesigned Tiguan, arriving in 2017, and the new small crossover to slot below it. Winterkorn was quoted this month by German newspaper Die Welt as saying that the automaker will follow up the midsize crossover with a smaller SUV that will be "Golf-based."

The smaller offering would share the overall proportions and size of the T-Roc concept shown at the 2014 Geneva show and would compete with new subcompact crossovers such as the Mazda CX-3 and Honda HR-V.

Bischoff acknowledged that U.S. market tastes were a big factor in the small crossover's design. He declined to say when such a vehicle would debut, but asked about its progress, Bischoff said, "It's done."

The redesigned Tiguan on display at Valhalla retains the overall proportions of its predecessor but with updated lines, plus shorter front and longer rear overhangs. Wheel arches are rounded compared with the hard angles seen on the midsize crossover, but some themes are shared, including wraparound taillight designs and grille execution. It grows 2.2 inches in length to 176.7 inches.

The larger Tiguan coming to the U.S., meanwhile, stretches to 184.6 inches long, Bischoff said, creating more cargo room and addressing a shortcoming of the current Tiguan that repelled some U.S. buyers.

The freshened Passat is also a substantial change from the model on sale now, with all-new sheet metal from the A-pillar forward, including a new hood, fenders, grille design and headlights. Taillights are also new.

The major midcycle update reflects VW's recognition that design changes, not just new powertrains or content improvements, fuel demand in the U.S.

The more Euro-centric approach has "been our philosophy for a long time," Bischoff said. That approach, he added, "while successful in Europe, does not seem to be the remedy for the rest of the world."