Mahindra & Mahindra (M&M) is planning to introduce a compact SUV to compete with the Ford EcoSport, according to Indian media reports.

ET Bureau said the he project, codenamed S102, is expected to be Mahindra-Ssangyong’s first jointly developed product. Based on Ssangyong’s X100, the S102 will make its worldwide debut in the first half of 2015. Mahindra’s SUV is expected to hit the market by end of 2015 or at the start of 2016. It is likely to be manufactured at the company’s Nasik facility.

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Mahindra-Ssangyong is working on a compact 1-litre turbocharged petrol engine equipped with variable valve timing and direct injection that is consistent with Ford’s Ecoboost engine, which is able to produce power that is equivalent to a bigger vehicle, although deliver superior fuel efficiency.

“We are jointly developing engine family comprising of six different engines, but the big one is the new product based on X100 platform. I think people, begin to see the value of it and that will only grow,” said Pawan Goenka, ED and president of M&M’s automotive & farm equipment businesses.

On the engine, Goenka said that both companies will decide and if approved, it will be ready in three years’ time. He added the development of the engine will partially take place out of India and partially in South Korea.

“We are just in the process of making the decision, to develop the technology for a series of engines that we talked about. If it was for Mahindra or Ssangyong alone, we probably would hesitate to do it, as the total amount of money required for doing the direct injection petrol is quite high. But if we pool ourselves together, then we can do it,” added Goenka.

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Goenka said that both the companies could possibly save tens of millions of dollar as a result of the joint development. A new automatic transmission is already sourced by the company that will be utilised both for Mahindra and Ssangyong products. The companies are also planning a small Trans-axle. M&M-Ssangyong is able to save around 5-7% on the material cost as a result of joint sourcing.