Analysis: Prospects for the new Shanghai VW Teramont

Shanghai VW has spent a full four years prepping the Teramont SUV for domestic production in China. It goes without saying that VW’s timing has been a bit on the slow side. While it is unclear exactly what machinations behind the scenes delayed the model’s launch for so long, the fact remains that VW has missed out on the huge SUV craze that the Chinese market underwent following the March 2010 release of its last China-bound SUV, the Tiguan.  

VW has achieved a leading share in the Chinese sedan market with its attractive portfolio of A-class sedans, like the Lavida and Bora, and selection of entry-level sedans, like the Santana and Jetta, as well as other sedans built on the MQB platform. Therefore, the fact that VW’s first domestically produced vehicle in the country was a sedan should come as no surprise to anyone. Despite being a successfully selling model, it also took around four years for VW to bring the domestically-build Lavida to market. Domestic analysts draw a parallel in development times for the domestic version of the Lavida to the upcoming Chinese-made Teramont.

The Teramont, much like the recently released Passat, is built on VW’s new MQB platform, making it. The Chinese Teramont will launch at the same time as its American compartment, named the Atlas. With the Teramont, VW is hoping to take advantage of market demand for a greater number of choices in the SUV segment, much like it was able to meet customer demand for B-class sedans with the redesigned Passat.

Following production of the Teramont, Shanghai VW also has plans to produce other SUV models, including the expanded wheelbase Tiguan L, scheduled for release next year. Counting the current Tiguan as well as the Skoda Kodiaq and Yeti SUVs, Shanghai VW will have a total of five SUVs on the market by the end of the next year.

The MQB measures 5,039 mm long, 1,989 mm wide and 1,773 mm tall, with a total wheelbase of 2,980 mm, making it similar in size to the Audi Q7 and quite a bit larger than that Toyota Highlander and Ford Edge, as well as the import only VW Touareg.

The Teramont’s larger dimensions make it better suited for the Chinese market compared to the similarly positioned Touareg, which may very well see its market position fade away. The Teramont’s combination of SUV drivability and MPV spaciousness, as well as its more competitive price point, make it an ideal candidate for VW to use to capture a slice of the lucrative SUV market.

The Teramont still inherits the same design principles found in the CrossBlue concept, with its American-style size, boxy lines and heavy presence all intact.

The Teramont’s design philosophy extends to the interior, which strives to deliver a feeling of roominess and clearly defined space.

Housed in the center of the instrument panel is a large 12.3-inch LCD display. Other features include a full panoramic sunroof and independent air conditioning for the three rows of seats. The seven seats are among the Teramont’s most standout features, making it ideal for the extended families commonly seen in China. With the seats folded up, the Teramont boasts a luggage capacity of 409 liters, compared to 400 liters available in the current Tiguan. That figure balloons to 2,415 liters when both second- and third-row seats are folded down.

Under the hood, the Teramont offers a choice between a 2.0 L TSI engine, which is available in both normal and high-performance specifications, and a 2.5 liter turbocharged V6 engine. Premium variants of the Teramont are driven on a DCC suspension with VW’s 4Motion technology. Drivers can select from eight different driving modes on the fly.

The Teramont’s price range is predicted to range from a low of 330,000 RMB for the base model to 600,000 RMB for a fully decked out model. In this price range the Teramont will find itself competing with domestic brand luxury SUV models. Its large dimensions, rich choice of accessories and high level of interior comfort are predicted to be instrumental in its success in China’s first- and second-tier markets. 

The Teramont’s role as one of the only joint venture offerings competing in a price range and segment dominated by domestic own brands could be a major strength for it. Furthermore, despite its late market release, the fact of the matter is that the very particular segment of the SUV market that the Teramont is marketed at is far from saturated yet, so there is still a lot of reasons to hold high hopes for sales success. If the Teramont delivers on those lofty expectations, it should be natural to assume that other joint ventures will introduce similar models of their own.