Volkswagen TERA SUV production starts in Brazil – Unit 1

Volkswagen has officially begun producing new TERA SUVs at its Taubat factory in Brazil, a major milestone in the brand’s SUV expansion strategy. TERA is expected to be Volkswagen’s most affordable SUV in Brazil, built on the MQB-A0 platform and shared with models like Polo, Nivus and T-Cross.

Although the Brazilian-spec TERA is more than four meters long, Volkswagen is expected to modify the SUVs in the Indian market to trim them to suit under 4 meters to benefit from lower taxes. The Indian-spec TERA is expected to be launched later this year or in 2026, positioning it as an established subtype SUV.

Volkswagen TERA – Production and Marketing Strategy in Brazil

The Taubaté factory also produces polo tracks and new polos, which provides more investment in the production of TERA. The move is part of Volkswagen’s broader strategy, with 16 new models planned for 2028. TERA production is expected to generate 260 direct jobs in the factory and up to 2600 indirect jobs in the supplier network.

Volkswagen plans to introduce multiple TERA variants in Brazil. The entry-level version of the spy footage reveals steel wheels with hubcaps, smaller than the 17-inch alloy seen on the premium version when the Rio Carnival debuted during the 2025 Rio Carnival.

Brazilian-specific Tera will A variety of powertrain options available:

– 1.0L MPI naturally aspirated gasoline engine – 84 hp, 10.3 kgm of torque, 5-speed manual transmission (basic variant expected)

– 1.0L TSI turbocharged petrol engine – 116 hp (similar to polo), manual and 6-speed automatic transmission options

– High-end variants may also get a 128 hp 1.0L TSI engine, similar to the Nivus and T-Cross

Volkswagen has confirmed that TERA will be available in Brazil later this year and will be exported to the international market soon.

Volkswagen TERA – Startup Schedule

In India, Volkswagen is expected to shorten the size of the TERA to fit under 4 meters SUV category, thus qualifying for lower tax benefits. The move is in line with Volkswagen’s localization strategy, making TERA a more competitive and affordable product in one of the fastest-growing SUV sectors.

The Indian-spec TERA may share components, body panels and features with the upcoming fellow model Skoda Kylaq. It is expected to be powered by a 1.0L TSI Turbo-Petrol engine that produces about 118 hp and 178 nm of torque, and offers manual and automatic transmission options.

Competition and expectations in India pricing

When launched, the Volkswagen Tera will compete directly with:

-Maruti Suzuki Brezza
– Tata Nexon
– Modern venue
– Become SONET
– Kia Syros
– Mahindra Xuv3xo

Given its competitor’s price positioning, the Indian-spec TERA may be priced between Rs 9 lakh and Rs 1.4 lakh (former showroom). Volkswagen is expected to launch the Indian-bound Tera in late 2025 or early 2026 and provide technical loads in a highly competitive segment of under 4mm, safety-focused SUV.