Maruti to drive in O2, phase out Versa

After close to a decade of celebrity endorsements and model upgrades, Maruti Suzuki’s multi utility vehicle (MUV) Versa will finally be phased.

The eight-seater Versa will be replaced by a newly designed MUV, codenamed O2, that will be launched around Diwali, said a company official who did not want to be named. The vehicle could be priced a little over Rs. 4 lakh.

“The management has decided to phase out Versa as it was not showing any significant buyer interest. Maruti is in the advanced stage of developing a much better and advanced vehicle from the Versa platform that will be launched later this year,” said the official.

Maruti sold a mere 500 units of Versa between April and July this year. Since the Versa platform is highly indigenised, the company expects to price the new vehicle lower than competition and earn better margins.

When Maruti launched Versa, the market for utility vehicles was not a sizeable one and the much more affordable Omni ruled the company’s fortunes in the segment. While the company sold about 29,000 units of the Omni between April and July this fiscal, the corresponding figure for Versa was around 500 units.

Versa costs between Rs. 3.5 lakh and Rs. 5 lakh, while Omni is half that amount.

Also, Versa is not able to compete against the top-end variants such as Mahindra Xylo and Toyota Innova despite being much cheaper as people prefer to pay more for quality. Bigger vehicles from competitors seating the same number of people are priced between Rs. 7 lakh and Rs. 8.5 lakh. On the other hand, Omni and Tata Ace continue to dominate among thrifty commercial users.

“In the second half of the decade, several players such as M&M, Tata Motors and Toyota launched their stylish UV variants. This meant a slow death for the Versa brand which was not as classy or spacious as its rivals,” said an analyst.

The company recently tried to re-position the vehicle from a family car to the one that caters to fleet owners and travel companies, but this did not work either. Though Maruti is the market leader in the passenger car segment, mainly due to its compact car dominance, it’s still struggling as far as other segments are concerned.O2 is seen as Maruti’s efforts to make inroads into the MPV/MUV segment.

Source: DNA