Volkswagen's Sub-4m SUV To Be Called Tera; Based On Skoda Kylaq

Volkswagen has announced that the name of its upcoming compact SUV will be "Tera." The SUV will first launch in Brazil, followed by other global markets where Volkswagen is present. VW India has yet to confirm the arrival of a sub-4m model for the Indian market, but it would make a lot of sense, given that the Skoda Kylaq has already been launched with prices starting at Rs 7.89 lakh (ex-showroom).

The VW Tera is expected to be powered by flex-fuel engines in Brazil. The power unit is likely to be the same 1.0-litre, 3-cylinder TSI petrol engine as the Kylaq, producing 115 hp and 178 Nm of peak torque. The Tera features LED headlamps with LED DRLs and a 2D VW logo at the center. It will be approximately 4 meters long with a wheelbase of 2,566 mm. The Tera will come equipped with modern features such as a large touchscreen with a digital driver display, sunroof, 360-degree camera, and six airbags.

VW Tera: Business Case

Volkswagen has not had a sub-Rs 10 lakh offering since the Polo was discontinued in 2022. Currently, entry into the VW brand starts at Rs 11.56 lakh (ex-showroom) for the base-spec Virtus. A more affordable sub-4m SUV would make the brand accessible to a broader range of buyers. The Skoda Kylaq's entry-level pricing has been announced, with a full launch set for December 2, and deliveries beginning in January 2025.

VW and Skoda already share platforms and components for models like the Slavia and Virtus, as well as the Kushaq and Taigun. A similar approach for the Kylaq and the sub-4m VW SUV would help the parent brand achieve higher volumes, justifying the investment in the platform.