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Volkswagen Sub Compact

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The Volkswagen's Kylaq based rival (possibly named Tera) could launch in late 2026 or early 2027 with a 1.0-liter TSI petrol engine.
8 Lakh*(Rumoured Price in India)
Expected Launch Date: January 2027
Volkswagen Tera Key Specs
E20 Compatible
Yes
Engine Size
998 cc
Fuel Type
Petrol

Volkswagen Tera Overview

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Anmol Kumar
Updated May 15, 2026

Volkswagen is gearing up to enter the highly competitive sub-four-meter SUV segment in India with a new model that could possibly be called the Tera. The upcoming SUV will be based on the localized MQB-A0-IN platform, which already underpins models like the Taigun and Virtus.

The Tera is expected to be Volkswagen’s version of the Skoda Kylaq, targeting a strong foothold in the high-volume compact SUV space. It will likely be positioned as the most affordable SUV in the brand’s India lineup, sitting below the Taigun and acting as an entry point for new buyers. 

In terms of design, it is expected to follow Volkswagen’s global SUV styling with clean lines, a solid stance, and a premium look. Local production at the Chakan plant will help keep costs in check while retaining the brand’s European engineering appeal.

 This model is expected to play a key role in Volkswagen’s India 2.0 strategy, helping the company expand its presence in the market.

Volkswagen Tera FAQs

VW may launch a Kyalq rival, but nothing is 100 percent confirmed.
Volkswagen Tera