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| DC Design, Carnation tie up for mass segment |
| BS Reporter / New Delhi Sep 22, 2009, 00:33 IST |
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Jagdish Khattar-promoted Carnation, a multi-brand car sales and servicing network, and the Dilip Chhabria-owned car design boutique DC Design have entered into a joint venture that will help the design studio offer its services to the mass segment at lower price points. Before this, DC’s services were restricted to high networth clients.
“This is a red letter day for us at DC Design. Our partnership with Carnation would broaden our design services to more customers in Carnation’s 11 outlets, which is expected to touch 30 soon,” DC Design founder Dilip Chhabria said.
According to the business model that was inked today, DC Design would provide the design for cars and luxury bus coaches, while the sales and servicing part for the designs will be taken care of by Carnation. However, this partnership does not mean DC Design will route all its businesses through Carnation.
“We will continue to offer B2B and B2C services outside this agreement,” Chhabria said. The joint venture would offer services for Toyota’s Innova, Tata Motors’ Nano, Honda’s City and Maruti’s Swift. Prices range between Rs 45,000 and Rs 4.95 lakh. Three more models — Toyota’s Fortuner, Force Motors’ Tempo Traveller and one from Skoda — would also be covered soon. Carnation CMD Jagish Khattar said future plans of the company to open multi-brand new car outlets would have to relooked in the aftermath of today’s agreement.
“With our partnership with DC Design, I think there’s more profit margins in selling new cars that bear DC’s design rather than just brand new cars,” he said. Carnation operates multi-brand car servicing centres, used car outlets, and offers car accessories.
DC Design said it would tap Carnation’s facilities once its tooling and fitting facility in Pune reaches full capacity. “We would train the multi-brand car service stations’ technicians on design aspects,” Chhabria said.
Mumbai-based DC Design is the only car design boutique in the country. The unorganised sector currently comprises car mechanics offering car fitments. No reliable figures are available pertaining to this market. “In the US and Europe, the customised car market is pegged between 2 and 5 per cent of the overall passenger vehicle segment. We expect India to assume this size. Last year, we posted a 40 per cent growth compared with the previous year,” Chhabria, who retrofits around 100 luxury cars every year, said.
The average cost of retrofitting a high-end luxury car with top-of-the-class features like LCD TV and leather seats is Rs 25 lakh. DC Design also retrofits Volvo buses, which costs about Rs 2 crore. Chhabria said over 90 per cent of his business comes from the coach business and very little from cars. The car design boutique is majority owned by Chhabria and a clutch of private investors.
“Financially, we would be self sufficient at this rate of business orders for the next five years. I have no plans to either raise funds or induct fresh investors,” Chhabria said.
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