Maruti Suzuki – End of the line for the Ritz?

Maruti Ritz, the compact hatchback from Maruti Suzuki, has seen very low sales volume in the recent months, forcing the company to stop it’s production. From an average of 2500 – 3500 cars a month, the sales of the Maruti Ritz had tapered off to just 5 in October 2016 (Source: SIAM). Launched in 2009, the Maruti Ritz was a moderately successful hatchback compared to the category leader Swift or the recently popular Celerio.

Maruti Suzuki has been grappling with low production capacity compared to the high demand for its cars. So, it is expected that the company will stop production of cars that are average performers and dedicate production capacities to cars with higher demand. Maruti Suzuki currently has 2 plants in Manesar and Gurgaon and will soon start production in their new plant in Gujarat.

Maruti Suzuki had announced a new model called the Ignis, which will be a compact crossover. But the launch has been postponed to middle of next year. It is believed that production constraints could be the reason for the delayed launch. The crossover segment is now seeing very good traction and the Ignis is expected to be a star in the Maruti Suzuki line-up.

Impact on Used-Car Value

Maruti Suzuki has routinely retired models while adding newer car models to match the trends of the auto market. But the value of the retired models remain strong in the used-car segment. The reasons for the strong showing in the used-car segment for Maruti models are

• easy availability of spare parts
• strong after-sales service
• overall good performance of the brand
• trust-worthiness of the brand, and
• affordability

The decision to scrap the model is not expected to have a big impact on the value of the Ritz in the used-car segment owing to the above mentioned reasons.