The new variant, W4 is powered by a a 2.2 litre diesel engine delivering power of 140 bhp, with a 6-speed transmission, the company said in a statement.
M&M Executive Director & President, Automotive & Farm Equipment Sectors Pawan Goenka said: "With over 74,000 vehicles on the road within two years of launch, the XUV 500 is one of our most successful launches.
"As a customer centric organisation, we have incorporated customer feedback at every step and evolved and today's W4 model launch bears testimony to the same."
"The launch of the W4 model makes the XUV 500 proposition accessible to more customers who aspire to be proud owners of XUV500, M&M Chief Executive, Automotive Division Pravin Shah said.
The existing XUV 500 is available at a price range of Rs 12 lakh to Rs 14.64 lakh (ex-showroom Delhi).
"In spite of being an entry level model of the XUV 500, the W4 model is technology laden and with this launch, we aim to attract sedan & compact SUV buyers who wish to upgrade to the XUV 500," he added.