Carnation Auto forays into premium car servicing

Carnation Auto, a multi-brand car service initiative by ex-Maruti Suzuki chief Jagdish Khattar, today launched a servicing facility for premium cars in Gurgaon in association with Fiat Group firm Magneti Marelli.

Along with Carnation Auto, the 4.5-billion euro Magneti Marelli also announced its foray into India's spare parts aftermarket to sell and distribute co-branded auto components.

"When we started our business of multi-brand servicing in 2008 for entry-level cars, people with luxury cars kept telling me to start it for their products also. We didn't have the competence, so we tied up with Magneti Marelli last year and we are starting it today," Carnation Auto Chairman and Managing Director Jagdish Khattar told reporters here.

The company, which currently has 20 servicing outlets in 13 cities across India, started the premium car servicing facility -- Auto Premio Solutions -- at its Gurgaon auto hub for catering to cars priced above Rs 10 lakh.

Khattar said the premium and luxury car market is pegged at 25,000 units annually, and about 25 per cent is concentrated in the National Capital Region.

"The actual size of our target is even bigger as the number of old cars completing their warranty periods is much more than new ones," he added.

Speaking on the Italian firm's plans to launch co-branded auto parts with Carnation, Magneti Marelli chief executive officer (After Market Parts and Services) Dino Maggioni said the company will sell products that are imported from its own facilities as well as sourced from local manufacturers.

"As of now, we will import parts from our facilities and third party manufacturers that already exist. Depending on demand and quality, we will also consider sourcing parts from the local market," he added.

Magneti Marelli's aftermarket division possesses over 30,000 spare parts across 30 product lines.

When asked to comment on pricing, Khattar said the components would be positioned 10-15 per cent lower than original equipment suppliers and 30-40 per cent higher than unbranded ones.

"The business plan for sourcing will be ready by the year-end, and then we will take a final decision," he added.

The total Indian auto component aftermarket business is pegged at over Rs 20,000 crore, of which about 35 per cent comes from the four-wheeler segment.

Besides this, Khattar said Carnation Auto would adopt four-five neighbourhood workshops in every city.

"We are planning to upgrade them, mainly to stop usage of spurious parts. For that, we will have to train the local people," he added.

The company is expecting a revenue of over Rs 100 crore this fiscal, and targeting a growth rate of 8-9 per cent for the next five years, Khattar said.