Volkswagen is looking at plugging the gap left by the retiring Touareg with an electric equivalent so the brand can continue to offer a flagship to higher-end customers, sales boss Martin Sander has confirmed.

The current combustion-engined SUV will bow out in just a few months after 24 years on sale as the firm focuses on higher-volume and lower-cost models.

However, Sander said there remains a gap in the market for upmarket cars that don't carry a premium badge – which the Touareg and Phaeton saloon (discontinued in 2016) were designed to serve.

Sander said: "We are the brand for the people, and that's what our name stands for." He added that the firm's "top priority" would remain "creating great vehicles" that are affordable to a wide range of consumers.

However, he also said: "Touareg is not huge business, but it's got its place and this is why we are looking into opportunities for a next generation.

"This market is somewhere between the volume and premium market and is for customers who want a vehicle with great design and space, and a very high level of quality and sophistication but, for whatever reason, do not want to be associated with a premium brand.

"This is the Touareg target group and we're looking into possibilities to serve these customers with a future product."

Sander said Touareg buyers "are very down-to-earth people who are affluent", adding: "They run businesses but are low-key. They don't want to show off. It's not appropriate to pull up in front of their customers or at the construction site with something like a Porsche Macan."

He confirmed the new model would remain a large SUV "because 80% of that market is SUVs" and would also be a full-electric offering.

Any 'ID Touareg' would probably arrive after the likes of the Volkswagen ID Golf on the incoming advanced SSP platform and could, as with today's Touareg, use technology from premium siblings Audi and Porsche.