From the images, the test mule does not seem to be different than the existing XUV500. So the changes expected in this variant are mostly under the hood. As it has been already reported that Mahindra is developing a new set of engines in association with their SsangYong company, this could be one of those variants with new engine config.
So is Mahindra working on a new variant of XUV500 for India, very much possible. But then there is a mention of AW, Japan on the test mule. This could mean that Mahindra is testing XUV500 for the Japanese market.
Mahindra had launched XUV500 back in September 2011. It was an instant success. There were huge number of bookings, and due to this they had to resort to lottery system for allotting deliveries. At the time of launch, Mahindra had emphasized that this is the car which they will market as a Global SUV, and if you see, they did. Mahindra XUV500 is already launched in European and African countries. So it is very much possible that the car you see in the images here, is actually being tested for the Japanese market.
Considering Mahindra does not have a footprint in Japan, they might use their South Korean company, SsangYong’s nameplate in order to launch the XUV500 in Japan.
Spy shots via MotorBeam