Xylo, XUV & Scorpio will never intrude into each other's segments.
XUV is priced well above the Scorpio & Xylo, the base model starts at almost 13 Lacs on road. Yes, The Scorpio A/T costs a little less than that, but you cant compare the top end A/T Scorpio to base M/T XUV.
Coming to Xylo, agreed that Xylo E9 competes with top end of Scorpio, that is, VLX M/T. But with Xylo E9, you get Airbags as standard, whereas in Scorpio VLX, you will have to pay more for Airbags. Also, they belong to different segments & cater to different customers. One is an MUV while other is an SUV. Scorpio cant carry passengers comfortably like the Xylo whereas Xylo cant have the image & style of the Scorpio.
With the E9, Mahindra has attempted to bring the Xylo in the premium segment, to directly compete with the Innova. There are many who like the mHawk engine of the Scorpio but are not happy with the space provided, the Xylo E9 is for them. For the more budget conscious customer, he can opt for the top end variant with mEagle engine, the Xylo E8.