The project of the vehicle, codenamed "Ingenio", was first announced by Mahindra in 2006 and was designed to compete in the Indian market with the Toyota Innova and the Chevrolet Tavera.

[citation needed] The Mahindra Xylo was comprehensively updated in 2012, featuring new transmissions and a modern 2.2-litre mHawk turbo-diesel engine for higher trim levels.

Other changes includes a revised suspension tuning, a restyled front fascia, smoked rear taillights, blacked out window pillars, and leather interiors for the top-of-the-line H9 model.

[citation needed] In addition to India, the Xylo was also sold in some selected international markets, including South Africa, Colombia, and a few various parts of Southern Asian and North African countries.

In June 2019, Mahindra announced that the Xylo will be discontinued due to the stricter crash safety and BS-VI emission standards, that would take place in March 2020.