Volkswagen's Kylaq-Based SUV Confirmed For 2027 Launch; To Rival Tata Nexon

Volkswagen India has confirmed its entry into the sub-4m compact SUV space. Recently, the automaker secured global approval for a new SUV based on the Skoda Kylaq, and has now officially confirmed that the model will make its debut in 2027. With this, the OEM is set to enter new territory and is betting on the model to expand its presence in "India's largest passenger vehicle segment."

Strategic Re-Entry

The new SUV will allow Volkswagen to target customers below the Taigun and Virtus. The sub-four-metre SUV market, which includes compact and micro-SUVs, currently accounts for a major chunk of India's passenger vehicle sales. Currently, it has models like Maruti Suzuki Brezza, Tata Nexon, Kia Sonet, Mahindra XUV 3XO, Skoda Kylaq, and others.

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Design And Powertrain

While the new Volkswagen SUV will share its platform and mechanicals with the Skoda Kylaq, it is expected to receive substantial design changes to establish a distinct Volkswagen identity. The differentiation is likely to extend to the exterior styling, interior layout, features and overall positioning.

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Under the bonnet, the compact SUV is expected to use the same 1.0-litre TSI turbo-petrol engine as the Kylaq, producing around 115 bhp and 178 Nm. It will be offered with a six-speed manual gearbox and an eight-speed torque-converter automatic transmission, the latter replacing the six-speed automatic currently used on the Kylaq.

Pricing

Although the final name has not been confirmed, Volkswagen already sells a closely related model called the Tera in Brazil. In India, the compact SUV is expected to be priced between Rs 8 lakh and Rs 13 lakh, depending on the variant and equipment.

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Domestic Manufacturing

The additional volumes from the compact SUV are expected to improve capacity utilisation at the Skoda Auto Volkswagen India plant in Chakan. Better economies of scale should help lower costs for both Volkswagen and Skoda, supporting more competitive pricing and feature content across their India line-ups.