This segment accounts for almost 70 per cent of the car market and Maruti Suzuki already has a 58 per cent share with brands like the Swift.
While the Swift, according to the company, has sportiness in its DNA, the Ritz with extra space is a family car.
The premium end of the compact segment, where the Ritz has been positioned, has grown at 26 per cent per annum in the last five years, while the segment itself has grown 16 per cent.
Sector experts say growth in the segment is largely driven by customers who are third-generation car owners used to the space of a sedan car but don't mind buying a feature-packed compact car that delivers superior fuel efficiency and sports contemporary European styling.
Like the Swift, the Ritz will compete with the Hyundai Getz and i10 and General Motors' UVA. The petrol-fired Ritz is available in three variants and will cost between Rs 390,000 and Rs 480,000, while the diesel engine-kitted Ritz (two variants) will cost between Rs 465,000 and Rs 499,000. Prices are introductory and ex-Delhi showroom.
To a question whether the Ritz priced and positioned directly against the Swift will cannibalise the latter's sales, company officials say they expect Swift sales to drop by about 9 per cent. Swift on an average sells around 9,000 units per month.
