The later Armada was the 'upscale' version of these cars, a flagship model aimed at a more urban market than Mahindra's usual clientele.

It was originally fitted with Peugeot's 2.1-liter XDP 4.90 diesel engine with 62 PS (46 kW) and was available in either a two- or a four-wheel drive version.

[citation needed] External design features included the flatter Bolero-style roofline; rectangular headlamps; body graphics; tacked-on plastic or fiberglass pieces in the grille area and on the wheel arches and bumpers.

The Armada likely represents the first attempt by any Indian firm to offer to the public what later became known as an MUV / SUV - an incrementally more upscale, comfortable, and road-oriented version of what had been a spartan, rugged, dirt-track utility vehicle.

At the 2000 motor show in New Delhi the Armada Grand LX was shown; it had a completely new design in front-end bodywork, independent front suspension (on two-wheel drive models), a five-speed gearbox and much improved sound insulation.