Kylaq Based Sub 4m Volkswagen SUV For India – Rs 275 Crore Project Approved

by · RushLane
Volkswagen Tera Sub 4m SUV

India’s sub-4-meter SUV segment has been registering strong growth, which presents valuable opportunities for top brands like Volkswagen

As part of its renewed business strategy, Volkswagen has stepped up focus on strong growth drivers. India’s sub-4-meter segment seems like the right bet, as this space generates sales of around 110,000 units per month. While the competition is intense, popular brands like Volkswagen should have relatively smooth sailing. Volkswagen recently confirmed that it will be launching a sub-4-meter SUV in India.

Volkswagen sub-4-meter SUV – What to expect?

VW’s new sub-4-meter SUV for India will be essentially a badge-engineered version of Skoda Kylaq. The latter has already emerged as a popular choice, consistently ranked in the list of top 10 bestselling sub-4-meter SUVs. In terms of volumes, Kylaq alone contributes around 60-65% of the brand’s monthly sales.

New Volkswagen Tera SUV

While based on the Kylaq, Volkswagen’s new sub-4-meter SUV will have distinctive styling, features and market positioning. Volkswagen is not entirely new to this space, as it earlier used to offer cars like the Polo hatchback and Ameo compact sedan in India. In Brazil, Volkswagen offers the Tera SUV (4,151 mm long), which is also closely related to Skoda Kylaq.

As the sub-4-meter segment is now much bigger in India and expected to grow further, there’s good scope for new products. Project cost for Volkswagen’s new sub-4-meter SUV is around 25 million euros (Rs 275 crore). Since the new SUV will be a badge-engineered version, launch should not take a long time. However, an exact timeline has not been revealed. This space is expected to get more crowded in the coming years.

Skoda Kylaq

Upcoming products include a new VinFast electric SUV, Mahindra Vision X, a new Hyundai electric SUV, a new Honda SUV and Renault Bridger. India’s sub-4-meter segment contributes around 30% to overall passenger vehicle sales. Contribution in the utility vehicle segment is over 50%. Current bestsellers include Tata Punch, Maruti Fronx, Tata Nexon, Maruti Brezza, Hyundai Venue, Mahindra XUV 3XO, Kia Sonet, Hyundai Exter, Skoda Kylaq and Toyota Taisor.

Volkswagen India Sales Breakup July 2026

Performance, features

Volkswagen’s new sub-4-meter SUV will be using the same 1.0-litre TSI petrol engine, as seen with the Kylaq. It generates 116 PS and 178 Nm of torque. Transmission choices include a 6-speed manual and a 6-speed automatic. However, the Volkswagen model will be using an 8-speed automatic transmission instead of the 6-speed unit. Kylaq will also get this new transmission with its next update.

Several of the features will be the same as that of Skoda Kylaq. The latter has features like a 10.1-inch touchscreen infotainment system, an 8-inch instrument cluster, wireless Android Auto and Apple CarPlay, and electric sunroof. Also included are features like wireless phone charger, automatic AC, front ventilated seats and 6-way electrically adjustable driver and co-driver seats.

Kylaq is rated as the safest car in its segment, based on Bharat NCAP scores. Safety kit includes features like 6 airbags, electronic stability control (ESC), hill hold control, cruise control and tyre pressure monitoring system. Also, multi collision brake, electronic differential lock and roll over protection. Volkswagen’s version is expected to offer a similar set of features.

Source – Autocar India