Carnation, the multi-brand car servicing major announced plans roll out its own brand of auto spare parts by mid-2010.
Jagadish Kattar, CMD of Carnation, speaking during the formal launch of nine service outlets, said that the company had plans to launch the company’s own brand of genuine spare parts for cars.
Company officials said they have begun importing specialised auto components from countries like Thailand and Taiwan to service luxury car brands like Honda and Toyota. Carnation currently is exploring options to engage domestic auto component vendors to contract manufacture car ancillaries, which will be sold under the Carnation brand name.
The domestic market for auto ancillaries is around Rs 20,000 crore. Vendors supplying auto parts to Maruti Suzuki and Hyundai are required to manufacture exclusively for the company. But executives in these companies say certain auto components that are not proprietary in nature are permitted to be manufactured and sold on a non-exclusive basis. Carnation executives say it’s here they would sell their private label of auto components, where quality is guaranteed.
The company, which has raised around Rs 108 crore from investors like Azim Premji and IFCI Ventures, plans to raise an additional Rs 180 crore primarily by way of debt funding from banks. The company expects its turnover to touch Rs 70 crore by the end of financial year 2009-10. “By the third quarter of the financial year 2010-2011, we expect to break even,” says Khattar.
Carnation plans to open an additional 30 multi-brand servicing outlets by the end of 2011. And plans to foray into the used car business and then into selling new cars in the next three years.