On Wednesday, Mahindra & Mahindra (M&M) said that it is planning to roll out a sub Rs. 5 lakh car. This is expected to be a sports-utility vehicle and will come under the brand of Xylo. The information was given by two people familiar with the development.

One of the major automakers in India was forced to take this step after Tata came out Nano and grabbed a big chunk in the Indian markets. Now, M&M is trying to do the same thing but in the sports-utility segment.

It is said that the company is trying to keep the price between Rs.45-5 lakh and is going to be cheaper by 25-30 per cent as compared to the existing model. The car is expected to touch the market by 2011.

The sources also revealed that M&M will be reducing the size of the car by 4 per cent so that it faces lesser excise duty. With its size, 10 per cent is expected to be the rate.

However, no official comment was made on the development.

Xylo is the most ambitious project of M&M and the price of it starts from Rs.7.5 lakh.