Mahindra & Mahindra (M&M) is re-entering the off-road compact SUV segment with Thar, a reworked version of the Commander Jeep that was pulled off the roads in early 2000.

The Mumbai-based utility vehicle major plans to price the sports utility vehicle at around Rs. 700,000 (US$ 15,720) and launch it in Kerala and Rajasthan next month, a person familiar with the development told.

The Thar has been selling in the South African markets, since the past two years, for Rs. 950,000-100,000. "It is the need for a retro-styled product that has forced M&M to launch the product in Indian markets," a person said on condition of anonymity. "This is a niche, retro-styled product and there will be a lot of young buyers and Jeep fans for such a vehicle," a Mumbai-based dealer said on condition of anonymity. The vehicle will be sold in soft top and hard top versions. A company spokesperson said, "As a matter of company policy, we do not comment on any of our future plans or products."

The Mahindra Thar, a derivative of the globally renowned Commander Jeep 5 (CJ5), has improved suspensions and features and better ground clearance to take on tough roads. It is powered by a 2.5 litre CRDi diesel engine.

A market research organisation, said there is a demand for retro products in the booming Indian auto market. "With Volkswagen recently launching the Beetle, and BMW looking at launching the Mini in the Indian market, M&M can surely find a foothold in this untapped market," he said.

M&M plans to produce the Thar on the Scorpio SUV assembly line at its Kandivili unit and hopes to sell 5,000 vehicles a year.