VW’s Tera compact SUV: A budget-friendly answer to China’s dominance

VW’s Tera compact SUV: A budget-friendly answer to China’s dominance

‍

Chinese manufacturers have been holding down sales charts since their rapid global expansion in the early 2020s, challenging industry giants like Volkswagen in major markets across the world. Major manufacturers, particularly Volkswagen, are already strengthening their portfolios in an effort to recapture some market share as Chinese car sales exploded by nearly 450% in the first half of 2024 compared to the same period in 2023.

‍

As a result, Volkswagen has just revealed the Tera, an entry-level crossover SUV designed for the Brazilian and Argentine markets, where the respective segment is booming. When you look at the Tera, you can tell it's the brand's response to increased competition, offering a competitive alternative to Chinese products. 

‍

Initially, it appears to be a smaller version of the Tiguan, but upon closer inspection, you'll notice sculpted lines that are in line with the brand's current design language. One of its standout features is the innovative rear lights with an effect called 'click-clack,' present in the current Tiguan. The interior closely resembles that of the current T-Cross, featuring air conditioning touch sliders, a floating infotainment system, and a digital instrument cluster that looks similar to that in the current Polo range.

‍

According to VW’s press release, the Tera will be sold in more than 25 countries, covering markets in Latin America and Africa. When asked for comment on the Tera's introduction to the local market, VW GA (Volkswagen Group Africa) did not provide a definitive answer. It did confirm, though, that its third locally built SUV is in the pipeline, set to roll off the production line at the Kariega plant in 2027 alongside the Polo and Polo Vivo, but it won’t be called the Tera.

‍

"We are working on a third model SUV which will be built at the Kariega plant alongside the Polo and Polo Vivo. It will not be called the Tera though. Production begins in 2027", said Tebogo Losaba, Media and Public Relations Manager at Volkswagen GA.

‍

This news ties into VW GA’s R4 billion investment in the respective plant, which was announced about a year ago. Given the timing, it’s likely that this new model is the one VW hinted at back then. Interestingly, the brand shortlisted four African-inspired names for the upcoming SUV, with a public naming campaign expected to launch in the coming months. As you may be aware, the current SUV and crossover range (T-Cross, Taigo, T-Roc, Tiguan, Tayron, and Touareg) begins with the letter 'T,' but VW SA has stated that this will not be the case for the new model. 

‍

The unknown crossover SUV will compete with models such as the Renault Kiger, Nissan Magnite, Kia Sonet, and, from China, the Chery Tiggo Cross and BAIC Beijing X55, to name a few.

‍

At this stage, details regarding the unnamed model are still scarce, but we know the Tera will be available in different trim levels to cater to different market segments. If introduced locally, we expect it to follow VW GA's familiar specification structure, which consists of the Base, Life, Style, and R-Line specifications. In terms of powertrains, it’s likely to offer a mix of naturally aspirated and TSI turbocharged engines, similar to the models it’s based on.

‍

It’s interesting to see a brand like VW taking a step to reclaim the market share and counter the growing influence of Chinese products both domestically and internationally. If they get the pricing right, this could be a major win for the brand in the budget-friendly crossover SUV segment.

‍