Volkswagen had announced that they will not enter in the sub-4-meter SUV segment well before that and this duty was solely with Skoda and it landed a bullseye by launching the Kylaq which is also doing decently. Those plans have been scaled back dramatically, with a Kylaq-based SUV now not expected until 2026 from Volkswagen.

Volkswagen To Enter Sub-4-Meter SUV Segment

Move over to the Skoda Kylaq for an idea of what Volkswagen’s sub-4-meter SUV might look like. Despite this, Volkswagen’s model will be clearly distinguishable and have a brand-specific design. This approach follows a pattern set with earlier tie-ups between Skoda and Volkswagen, including the Kushaq/Taigun as well as Slavia/Virtus sibling models. The SUV could also be inspired by a sub-4-meter model Volkswagen is expected to launch in Brazil, teasers for which have already been out.

The upcoming sub-4-meter VW SUV, following the Brazilian model, will present a new front grille with type-specific lighting elements like distinctive headlamps and tailgate in an updated bumper design. The interior features are expected to be the same — but unique. The cost of development for the Volkswagen version is pegged at as high as 25 million euros (approx ₹227.5 crore).

Volkswagen had earlier hinted that it would revive the Polo brand name in India, leading to rumors about this new sub-4-meter SUV being dubbed as the Polo SUV. That will be mated to a 115-hp version of the familiar 1.0-litre turbo petrol engine used in the Skoda Kylaq SUV with which this car shares its underpinnings, and it’s likely that unit may well prove the sole power choice for both models.

With as many 12-odd competitors in the sub-four-metre segment, launching it only by 2026 may seem delayed. Interestingly, this segment also keeps on growing fast due to more and more of the erstwhile hatchback buyers transitioning over to compact SUVs. If the market items haven’t changed, presumably placing a vehicle on sale there would be advantageous to Volkswagen’s upcoming Kylaq-based SUV. The exotic country is likely to shine in design, but when you add a bucket of features and bargain basement pricing with Polo branding on top, the success recipe might be too explosive.

Earlier, Volkswagen took a call to stay away from the sub-4-meter SUV segment. One significant reason behind this was the tepid performance of Ameo, which reportedly had a development cost of 70-75 million euros (about ₹683 crore). From 2016 to 2020, only about 32,000 units were sold, resulting in disappointing returns, especially since Skoda opted not to launch its own Ameo variant.

Additionally, the Skoda-Volkswagen partnership involved a division of responsibilities, with Skoda focusing on developing internal combustion engine (ICE) models while Volkswagen aimed at electric vehicles (EVs). Volkswagen previously planned to transition to an all-electric brand in India by 2028, but the market dynamics have shifted significantly, leading to slower EV sales and a lack of dedicated mass-market EVs from both brands.

As initial electrification targets are being extended, Volkswagen is reconsidering its stance in the ICE segment. Entering the sub-4-meter market will help justify the costs associated with the new platform, part of a larger 250 million euro (₹2,276 crore) project aimed at increasing plant utilization under the company’s ‘India 2.5’ initiative. With Volkswagen boosting production volumes, achieving economies of scale will become more attainable.