Volkswagen’s much-discussed compact SUV for India, which is expected to be based on the Skoda Kylaq, has reportedly received global approval. If it makes it to production, the new model will mark Volkswagen’s return to the highly competitive sub-four-metre segment following the discontinuation of the Polo hatchback and Ameo compact sedan.

According to the report, the project has been approved with an estimated investment of around 25 million euros, which translates to approximately Rs. 275 crore. The SUV is expected to play an important role in expanding Volkswagen India’s portfolio, giving the brand a presence in one of the country’s biggest passenger vehicle segments.

The upcoming SUV is likely to share its mechanical platform and underpinnings with the Skoda Kylaq, but will feature Volkswagen-specific design elements both inside and out. Reports indicate that its features and overall positioning could also be tailored to give it a distinct identity from its Skoda counterpart.

Power is expected to come from the same 1.0-litre TSI turbo-petrol engine used by the Kylaq, with manual and automatic gearbox options likely to be offered. However, the report claims Volkswagen could introduce an 8-speed automatic transmission from the outset, replacing the 6-speed automatic currently available with the Kylaq. Skoda is also reportedly considering the new transmission for a future update to its compact SUV.

If the reported plans go ahead, the new model would bring Volkswagen back into India’s rapidly growing sub-four-metre SUV space. The segment contributes a substantial portion of passenger vehicle sales in the country and currently includes popular models such as the Tata Punch, Tata Nexon, Maruti Suzuki Fronx and Maruti Suzuki Brezza.

The compact SUV could also help increase production volumes at Skoda Auto Volkswagen India’s Chakan plant. At the same time, it would give customers a more accessible way to enter the Volkswagen lineup, sitting alongside the Taigun and Virtus.

Volkswagen has yet to officially confirm the development of the model. However, if the reported plans become a reality, the Kylaq-based SUV could become a significant addition to Volkswagen’s India portfolio.