We show that large amplitude, coherent acoustic phonon wavepackets can be generated and detected in InxGa1−xN/GaN epilayers and heterostructures in femtosecond pump-probe differential reflectivity experiments. The amplitude of the coherent phonon increases with increasing Indium fraction x and unlike other coherent phonon oscillations, both amplitude and period are strong functions of the laser probe energy. The amplitude of the oscillation is substantially and almost instantaneously reduced when the wavepacket reaches a GaN-sapphire interface below the surface indicating that the phonon wavepackets are useful for imaging below the surface. A theoretical model is proposed which fits the experiments well and helps to deduce the strength of the phonon wavepackets. Our model shows that localized coherent phonon wavepackets are generated by the femtosecond pump laser in the epilayer near the surface. The wavepackets then propagate through a GaN layer changing the local index of refraction, primarily through the Franz-Keldysh effect, and as a result, modulate the reflectivity of the probe beam. Our model correctly predicts the experimental dependence on probe-wavelength as well as epilayer thickness.