The Seat Leon-based SUV will appeal to buyers wanting better agility, practicality and more expressive design than available from rival makers, company boss Jürgen Stackmann has said.
The new SUV will launch as a Nissan Qashqai rival in 2016, and kickstart a family of crossovers made by the firm. It will be followed in 2017 by a new Nissan Juke-sized supermini SUV, and, if all goes to plan, a larger SUV with seven seats by 2020.
"The first test mules are on the road now and we are already optimistic for what is to come," said Stackmann. "We are looking for agility and precision from the dynamics, utility inside and great design that expresses our values. We have done a lot of research in to why people buy these kinds of vehicles and what our competitors already offer, and these characteristics should help us stand out.
"The design is perhaps the most interesting part. It is not about giving the vehicle a rough and tumble look - most will never go off-road. People buy these cars for their function, because the high seat gives them better visibility and a feeling of safety and because they express personality perhaps better than any other mainstream section of the car market."
The Seat Leon-based SUV will be built on VW Group's MQB platform and built by sister brand Skoda in the Czech Republic. Skoda is also planning its own seven-seat SUV, which will launch at the end of 2016.
Stackmann has previously revealed the firm's SUV was unlikely to have any connection with the Leon name, despite the new model having a similar footprint to the Spanish manufacturer's family hatchback.