New Volkswagen compact SUV under works, to be based on Skoda Kylaq

Volkswagen's upcoming compact SUV will share its platform and engine with the India-only Skoda Kylaq.

Megan C

Megan C

August 14, 2026

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3 mins read

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Megan C
Megan C

14 August, 2026

Access Time

3 mins read

Volkswagen is developing a new compact SUV built on the same platform and powered by the same engine as the India-restricted Skoda Kylaq, with the model expected to launch in 2027.

The new Volkswagen has received the go ahead for production in India, where it will act as an entry-level offering in the high volume sub-four-metre class SUV market.

While its arrival in Australia is not certain, the new Volkswagen model is another example of the shared underpinnings and different exterior and interior treatments of vehicles developed by Volkswagen and Skoda.

Read more: Volkswagen Amarok V6 W600 priced from $91,990

Volkswagen SUV to share parts with Skoda Kylaq

Volkswagen compact SUV India

The new Volkswagen compact SUV will share its underpinnings and engine with the Skoda Kylaq.

Based on the MQB-A0-IN platform developed for the Indian market and likely to be powered by the same 1.0-litre turbo petrol engine, the Volkswagen model will be largely similar to the Kylaq in its mechanics.

The turbocharged three-cylinder engine produces 85kW and 178Nm and is available in manual and automatic variants in the Kylaq, with the automatic variants using a six-speed torque converter. While the manual uses a five-speed, reports suggest the Volkswagen version is likely to use an eight-speed automatic instead.

While the two models are expected use largely shared mechanicals, they are likely to differ significantly in their exterior design and interior equipment, as well as their target market

Rather than simply rebadging the Kylaq as a Volkswagen, the German manufacturer is likely to use a substantially different exterior design and possibly different interior equipment to differentiate the vehicles despite their similarities in mechanical and technological equipment

Read more: VW Group’s new full hybrid powertrain debuts late 2026

Kylaq-based Volkswagen SUV remains unconfirmed for Australia

The new Volkswagen model is likely to be released in India, with no immediate plans for its release anywhere else, including Australia.

The Skoda Kylaq is also an India-exclusive model and so locals looking to purchase a Skoda or Volkswagen SUV are unlikely to see these vehicles arrive on the domestic market.

If it were eventually introduced in Australia, the Kylaq-based Volkswagen would compete with small SUVs such as the Mazda CX-3 and Hyundai Venue, etc, while its sub-four-metre dimensions would give it a particularly compact footprint. 

The project does, however, highlight how Volkswagen Group brands can share platforms, engines and other components while using different exterior designs, interiors and equipment to create distinct models for different markets.

Volkswagen has not confirmed a name for the new SUV. The brand already sells the closely related Tera in Brazil, although it remains unclear whether that name will be used for the Indian-market model.

Source: AUTOCAR – Volkswagen Kylaq-based compact SUV confirmed for India

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