According to this video by Auto Bild, the name is subject to change. Instead of Taigun, it will be called the T-Rack, following the lead set by the T-Cross and T-Roc.
The reason for Volkswagen's change of heart is continued growth from other manufacturers in this segment. Renault-Nissan, who is now the biggest automaker in the world, has the Kwid, which has just been launched in Latin America. There's also the Honda HR-V. Meanwhile, the cut-price Ford EcoSport is taking over in Europe and even America.
The delay of the Taigun project could end up hurting VW, though, as this new model won't be ready sooner than 2020. It's rumored to be based on the successor to the current Up!, which VW might develop without Skoda and SEAT. The 3.8-meter crossover should be powered exclusively by the 1.0 MPI and 1.0 TSI 3-cylinder engines sending the grunt to the front wheels.
Of course, styling will be revised, and as you can see Auto Bild has rendered something that looks a little bit like the T-Roc. Tapered headlights and chunky off-roader cladding will help the smallest Volkswagen soft-roader sell. However, it's yet unclear if or when it will be sold in Europe, while North America is strictly out of the question.