Volkswagen has officially commenced production of the new Tera SUV at its Taubaté plant in Brazil, marking a major milestone in the brand’s SUV expansion strategy. Expected to be Volkswagen’s most affordable SUV in Brazil, the Tera is built on the MQB-A0 platform, shared with models like the Polo, Nivus, and T-Cross.
While the Brazil-spec Tera exceeds four meters in length, Volkswagen is expected to modify the SUV for the Indian market, trimming it down to fit within the sub-4 meter category to benefit from lower taxation. The India-spec Tera is anticipated to launch later this year or in 2026, positioning itself against established subcompact SUVs.
Volkswagen Tera – Brazil Production and Market Strategy
The Taubaté plant, which also produces the Polo Track and new Polo, received added investment for the Tera’s production. This move is part of Volkswagen’s broader strategy, with 16 new models planned by 2028. The Tera’s production is expected to generate 260 direct jobs at the factory and up to 2,600 indirect jobs in the supplier network.
Volkswagen plans to introduce multiple variants of the Tera in Brazil. Spy shots of an entry-level version reveal steel wheels with hubcaps, smaller than the 17-inch alloys seen on the top-end High variant with the Oufit package at its public debut during Rio Carnival 2025.
The Brazilian-spec Tera will offer multiple powertrain options:
– 1.0L MPI naturally aspirated petrol engine – 84 hp, 10.3 kgm torque, 5-speed manual transmission (expected on base variants)
– 1.0L TSI turbocharged petrol engine – 116 hp (similar to the Polo), manual and 6-speed automatic transmission options
– Higher-end variants could also get the 128 hp 1.0L TSI engine, similar to the Nivus and T-Cross
Volkswagen has confirmed that the Tera will go on sale in Brazil later this year, with exports to international markets starting soon after.
Volkswagen Tera in India – Launch Timeline
In India, Volkswagen is expected to shorten the Tera’s dimensions to fit within the sub-4 meter SUV category, allowing it to qualify for lower tax benefits. This move aligns with Volkswagen’s localization strategy, making the Tera a more competitive and affordable offering in one of the fastest-growing SUV segments.
The India-spec Tera will likely share components, body panels, and features with the upcoming Skoda Kylaq, its sibling model. It is expected to be powered by the 1.0L TSI turbo-petrol engine, producing around 118 hp and 178 Nm of torque, with both manual and automatic transmission options.
Competition and Expected Pricing in India
When launched, the Volkswagen Tera will compete directly with:
– Maruti Suzuki Brezza
– Tata Nexon
– Hyundai Venue
– Be Sonet
– Kia Syros
– Mahindra XUV3XO
Given the price positioning of its competitors, the India-spec Tera could be priced between Rs 9 lakh and Rs 14 lakh (ex-showroom). Volkswagen is expected to unveil the India-bound Tera by late 2025 or early 2026, offering a tech-loaded, safety-focused, and performance-driven SUV in the highly competitive sub-4 meter segment.
