At the launch of the 2015 XUV500 facelift, Mahindra chalked out plans for bringing out nine cars in 2015, including three new vehicles. Out of the three SUVs, two were Compact SUVs – U301 and S101. The U301 was later named as TUV300 and the launch is scheduled on 10 September. The S101, renamed XUV100, is undergoing final tests before the 2015-end launch.

The aggressive product launch strategy does not take a break after the XUV100 launch. According to the latest report from, Mahindra is also working on a compact SUV christened TUV500. The new SUV will not be a sub-four metre SUV. It will bridge the gap between TUV300 and XUV500.

Mahindra already has the Scorpio in the segment. However, TUV500 will not cannibalise on Scorpio sales as it will be designed purely for urban buyers. The Scorpio is more popular among semi-urban and rural buyers.

The TUV500 is expected to be based on the traditional body-on-ladder frame chassis that also underpins the TUV300 and the new Scorpio. The TUV500 is expected to share parts from TUV300 and XUV500. This will help Mahindra to keep its price low.

Though the engine details are yet to be divulged, Quanto's 1.5-litre mHawk80 diesel engine in a higher state of tune can be expected. The company might also offer the re-tuned version of the 2.5-litre CRDe diesel engine that also powers the Scorpio.

The TUV500 targets rivals like Renault Duster and Hyundai Creta. The vehicle might be unveiled in mid-2016.