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Mahindra Xylo, an MUV (multi utility vehicle) which was launched in India in January 2009, is all set be rolled out in a compact version in the country soon, reported a leading Indian news daily on Friday. The report further adds the new compact Mahindra Xylo could carry a price tag of Rs 4.5-5 lakh (up to 40 % cheaper than the existing model of Xylo).

The company is reportedly working on achieving a length of less then 4 meters for this new compact Mahindra Xylo so that it can qualify for the lower excise duty segment which attracts duty of mere 10 percent, as compared to the excise duty of 22 percent on existing model of Xylo. However, the company hasn't made any official announcement in this regard, so far.

The price segment of sub Rs 5 lakh accounts for about 60 percent of the total car sales in India and if Mahindra manages to bring down the price of this prospective vehicle below this mark, it will be directly competing with some of the most popular and best-selling cars in India including Maruti Wagon R and A-Star, Hyundai Santro and i10, Chevrolet Beat, Fiat Punto, Tata Indica and Ford Figo.

At present, Premier Rio is the only utility vehicle available in the price segment Sub Rs 5 lakh, a segment which is untapped in the Indian market so far. And if Mahindra decides to enter this segment, it will further attract other auto biggies to mark their debut in this segment.

Meanwhile, the company is also eying to roll-out its Xylo model in a micro-hybrid version by the end of this year. With this, it is also planning to launch the Xylo in foreign auto-markets like Africa in the coming months.

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