Volkswagen Passenger Cars is looking to strengthen its presence in India’s mass-market passenger vehicle segment with a new sub-four-metre compact SUV. The German carmaker also plans to further differentiate its brand from sister marque Skoda as it expands its product portfolio in the country.
Volkswagen CEO Thomas Schäfer said the company aims to strengthen its position as a volume player in India, but its growth has been constrained by a limited presence across key segments. Volkswagen plans to enter the sub-four-metre SUV segment next year, with further expansion into new segments and powertrain options to follow.
The upcoming compact SUV will become Volkswagen’s most affordable model in India since the Polo hatchback was discontinued in 2022. The company currently sells the Tiguan, Taigun, Virtus and Tayron in the Indian market.
According to data from the Society of Indian Automobile Manufacturers (SIAM), Volkswagen Passenger Cars dispatched 10,629 units in the first four months of FY2026-27, marking an 11.4 per cent decline compared with the same period a year earlier.
Volkswagen To Enter India’s Largest SUV Segment
The new sub-four-metre SUV will be based on Volkswagen’s locally developed MQB-A0-IN platform, which also underpins the Skoda Kylaq. The Volkswagen model will essentially be a cross-badged version of the Kylaq, with changes expected in areas such as styling, design details and brand-specific elements.
Cross-badging allows automakers to share platforms, components and development costs while selling related vehicles under different brands. Similar strategies have been used by manufacturers such as Maruti Suzuki and Toyota, as well as Renault and Nissan.
Schäfer described the sub-four-metre segment as essential for Volkswagen’s growth in India, noting that it accounts for around 28 per cent of the country’s passenger vehicle market. Entering this segment is therefore expected to significantly expand Volkswagen’s addressable customer base.
Focus On Clear Brand Differentiation
While Volkswagen, Skoda and other brands within the Volkswagen Group will continue to share technology and components, Schäfer said the company is focused on ensuring that each brand has a distinct identity.
Volkswagen has spent the past four years working to separate the identities of Volkswagen, Skoda and Cupra after acknowledging that similarities between products had begun to blur the differences between the brands.
For India, this means the upcoming compact SUV will need to offer a distinct design, driving experience and positioning despite sharing its underlying architecture with the Skoda Kylaq and other group products.
India Could Become An Export Base
Volkswagen also sees India as an increasingly important manufacturing and development hub. Schäfer said the new compact SUV could serve not only the domestic market but also become an export product.
The company is also exploring opportunities that could emerge from the India-EU free trade agreement. Lower trade barriers could potentially make it more viable for Volkswagen to bring niche European models to India that are currently too expensive to import.
For now, however, Volkswagen’s immediate priority is clear: entering the sub-four-metre SUV segment, expanding its reach into India’s mass market and putting the brand on a stronger growth trajectory.
