Volkswagen has officially secured global approval for a 25 million euro (approximately Rs 275 crore) project to introduce a new sub-four-metre compact SUV to the Indian market. This upcoming model will be heavily based on the Skoda Kylaq but will undergo substantial exterior and interior design changes, along with unique feature additions, to ensure it maintains a distinct Volkswagen identity. While the official name for the Indian market remains unconfirmed, a closely related model is currently sold in Brazil as the Volkswagen Tera.
Under the hood, the new SUV will be powered by the same 1.0-litre TSI petrol engine found in the Kylaq. It will be offered with both manual and automatic transmission options, notably featuring an 8-speed automatic gearbox at launch rather than the 6-speed automatic currently seen on the Skoda counterpart. The vehicle is expected to be priced competitively between Rs 8 lakh and Rs 13 lakh (ex-showroom) and will be positioned below the existing Taigun and Virtus models in the company’s lineup.
This strategic launch marks Volkswagen’s return to India’s high-volume sub-four-metre segment, a space it vacated after discontinuing the Polo hatchback and Ameo sedan. By re-entering a category that accounts for a significant portion of India’s passenger vehicle sales, Volkswagen aims to reach a broader customer base while simultaneously improving capacity utilization and economies of scale at the Skoda Auto Volkswagen India manufacturing plant in Chakan.
Built on the MQB-A0-IN platform, the upcoming SUV will be Volkswagen’s most accessible model offering in the country and is aimedat addressing one of the largest segments of the Indian passenger vehicle market.
Developed with a strong focus on high localisation and Indian market preferences, the new compact SUV will be engineered to deliver Volkswagen’s core valuesof German-engineering, safety and buildquality. The MQB-A0-IN platform enables the use of efficient powertrains, advanced technology and safety systems for India.
Commenting on the announcement, Mr. Thomas Schäfer, CEO, Volkswagen Passenger Cars Brand, and Member of the Board of Management of Volkswagen AG, said, “India is a market of enormous scale and ambition, and this new compact SUV marks an important step in Volkswagen’s journey here.We are bringing our global expertise in building cars that people love to drive and own into a segment of great importance to Indian customers. This model is being developed specifically for India, and it reinforces our long-term commitment to the Indian marketas part of our global growth strategy.”
Mr. Piyush Arora, Managing Director & CEO, Škoda Auto Volkswagen India, said, “This announcement reflects the depth of our commitment to India, not just as a market but as a manufacturing and innovation base for the Volkswagen Group globally. The new compact SUV will be developed in India, for India, and locally produced, buildingon the strength of our existing MQB-A0-IN platform ecosystem. It will deepen our supplier network, create opportunities across our manufacturing and business ecosystem, and further our vision of positioning India as a competitive development and productionhub. This is Volkswagen’s continued investment in India’s growth story.”
Mr. Nitin Kohli, Brand Director, Volkswagen India, added, “With this new compact SUV, we are democratising German-engineering for the affluent Indiancompact SUV buyer. The all-new SUV will deliver scale and volume, bringing our core tenets of fun-to-drive performance, safety and build quality into the largest, highest-volume segment in India. As we move closer to the 2027 market introduction, we will expandour presence in India, reaching out to a new customer base in the country.”
The compact SUV will be built on the MQB-A0-IN platform that is developed and tailor-made for the Indian market. Co-developed by engineering teams in Indiaand Europe, the platform is designed for high localisation, low cost of ownership and efficient production timelines, while enabling advanced safety systems and efficient powertrains suited to Indian emission and safety norms.
