Mahindra will expand its line-up with a new MPV codenamed Mahindra U321/S321. A top-spec Mahindra U321/S321 was recently spotted testing on the roads, courtesy MotorOctane.

The top-spec Mahindra U321 seen in the spy photos features projector headlamps and double-spoke alloy wheels. It appears to have XUV-like peeled back fog lamps as well. The U321 will replace the Xylo that launched in 2009. Unlike the Xylo, it will have traditional MPV design & proportions.

The U321 is the first vehicle developed by the Mahindra North American Technical Center based in Troy, Michigan. Reports say that the U321 rides on an all-new platform. Mahindra is reportedly ready with a new 1.6-litre four-cylinder diesel engine developed with SsangYong, which the U321 will be a direct beneficiary of. The companies are also working on new 1.5- and 2.0-litre petrol engines, and the former could serve in the U321.


The new 2.0-litre petrol engine, along with the already available 2.2-litre diesel and 1.99-litre diesel (Delhi-NCR only) engines, would help it compete much better with the Toyota Innova, though. Much depends on how Mahindra wants to position the 7-seat MPV, as a product slotted between the Maruti Ertiga and Toyota Innova, or an outright Toyota Innova rival. Bigger and more powerful engines would also mean a stronger potential for exports.

The Mahindra U321 will go on sale in India later this year. Its production will take place at the Nashik plant.