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This paper discusses the effect of torque vectoring differential on improving vehicle handling and stability performance. The torque vectoring concept has been analyzed. The vehicle discussed in this paper is an AWD vehicle with torque vectoring differential in the rear and a torque biasing center differential. First, simulation results with vehicle model in CarSim® and torque vectoring control algorithm in Matlab®/Simulink® is discussed. Then, experimental results for vehicle tested at winter and summer test facility is presented. Both simulation and experimental results demonstrate the effectiveness of torque vectoring differential on vehicle handling & stability.