Update: Mahindra U301 to be called TUV300, launch in September 2015

Mahindra's U301 compact SUV has the potential to be a game changer for the Indian utility vehicle maker.

Expected to be sold at a slight premium over the Bolero, which will carry on in the line-up the yet-to-be-named, compact SUV or U301 is in a fairly advanced stage of development.

Mahindra, however, is currently putting its shoulder to the wheel trying to make the U301 more efficient. While its earlier products have done well in this area, the new U301 is currently unable to match efficiency levels set by the vehicle it is benchmarked against — the Quanto. This has brought up a lot of issues for the company's engineers. Gear ratios are being played around with, turbo and intercooler plumbing are being looked at and changes are also being made to the ECU. Mahindra should eventually crack the issue and the U301 should get an impressive ARAI- tested fuel economy figure, but for now, if you spot a pair of U301's followed by a Quanto you can guess what is being tested.

Overall, the U301, however is the new Mahindra with the most promise. Expected sometime in late 2015, the U301 will be far more  comfortable and is likley to to offer really good value. Its massive wheelbase looks to be more than 2500mm long and it's wide on the inside, so no surprise if the space for both the first and second row passengers is generous. And because it will qualify as a sub-four-meters long car, it's likely to be really affordable. Then ride and handling with the new Magna- based chassis is likely to be a clear step-up from the current car.