Handling characteristics of any vehicle refer to its directional control and stability for given steering input. The vehicle parameters such as mass, mass moment of inertia and location of C.G. play a vital role and decide handling response of vehicle under different scenarios. Safe drive is ensured by vehicle's responses such as yaw rate, roll rate and vehicle lateral acceleration. This paper presents steady state and transient state simulation of XUV 500 model in accordance with ISO 4138 and ISO 3888 test standards using CarSim-Simulink Co-simulation. Influence of changes in above mentioned parameters on Vehicle response during both tests is investigated. Further, control of power train output using torque vectoring is implemented in both tests and its effect on vehicle response is evaluated. The results show that understeer tendency of the vehicle is reduced in steady state test (Constant radius test: ISO 4138). Critical vehicle responses of yaw rate, roll rate, lateral acceleration and path tracking showed improvement during the DLC manoeuvre (ISO 3888) hence, improving stability at higher lateral accelerations. © 2019 IOP Publishing Ltd. All rights reserved.