VW compact SUV based on Skoda Kylaq coming in 2026

The development cost of the new Kylaq-based compact SUV is said to be 25 million euros.

Skoda is gearing up to unveil its first compact SUV for India, the Kylaq, next month. It has now been reported that Volkswagen is also planning to launch its version of the compact SUV in 2026.

VW’s new compact SUV will be based on the same MQB-A0-IN platform as the Kylaq, with a 1.0-litre turbo-petrol engine under the bonnet. It will feature a different top hat with brand-specific styling. Reports suggest that it will cost around 25 million euros to develop.

Volkswagen had initially decided to stay away from the compact SUV segment in India due to profitability concerns. The carmaker had limited success when it first entered the sub-4-metre market with the Ameo, as it failed to justify the investment.

While the Ameo did benefit from tax breaks, VW lost out on economies of scale as Skoda decided against introducing its own version. The car also had limited export potential as the sub-4 metre market is unique to India.

As part of the VW Group’s strategy, Skoda was tasked with developing ICE models, while VW focused on EVs. However, with changing market dynamics and a slowdown in global EV sales, VW is now looking at the highly competitive yet lucrative sub-4 metre SUV segment in India.

Source: Autocar India