Skoda is gearing up to enter the fiercely competitive compact SUV segment in the Indian market with an all-new product. As part of the brand's India 2.5 strategy, the upcoming sub-4-meter SUV is set to commence production by January 2025, with an anticipated launch in the following year. Skoda aims for substantial localization, targeting 90%, and plans to manufacture the compact SUV in India for both domestic consumption and export to international markets, including Mexico and Africa.

Despite the intense competition in the segment, Skoda is poised to offer a highly competitive pricing strategy for its new compact SUV, capitalizing on heavy localization and leveraging tax rebates associated with the sub-4-meter body size. The model will share significant components with the India 2.0 models from both Volkswagen and Skoda, including the MQB A0 IN platform, suspension, interior components, electrical parts, and infotainment devices.

Drawing on its existing local supply chain and manufacturing capabilities, Skoda aims to achieve a similar or higher level of localization with its India 2.5 products. The compact SUV will be based on the well-known MQB A0 IN platform. Powering the vehicle will be the familiar 1.0-litre TSI engine, producing 115 bhp and 178 Nm of peak torque, a choice aimed at reducing costs due to lower taxation on engines below 1000cc. While a 1.5-litre turbo petrol unit is under consideration, its suitability for the price-sensitive segment is uncertain.

Upon its launch, the new Skoda compact SUV is expected to face stiff competition from popular models in the Indian market, including the Maruti Suzuki Brezza, Kia Sonet, Hyundai Venue, Tata Nexon, and Mahindra XUV300, among others.