CarZ to expand its multi-brand car workshop network

The Indian automobile industry is booming and by 2016 car sales are projected to rise to 4.88 million units. However, OEMs are lagging behind in setting up adequate facilities. 

The shortage of service centres and high servicing costs have seen roughly 2/3rd of the vehicles going to local garages post warranty, These garages do not have the technical expertise to service/repair modern vehicles. 

Multi-brand car servicing chains like CarZ, Carnation, Mahindra First Choice and MyTVS, meanwhile, are capable of servicing vehicles from various car manufacturers under one roof. The multi-brand car servicing business is lucrative considering the number of new cars coming on to our roads everyday.

Mechanics and technicians in multi-brand car workshops have the required skills, as they usually have the experience of working in various OEMs. Moreover, apart from reliable service, multi-brand car servicing workshops levy lower service charges due to lower costs of establishment. 

CarZ opened its first workshop in 2010 in Hyderabad, aims to capitalise on this opportunity and plans to expand its operations across India. With funding of $ 5 million (Rs. 27.7 crore) from Indo-US Ventures, it aims to set up 300 multi-brand car workshops across the country by March 2018. A total of 200 dealerships will be operated by CarZ and 100 dealerships will be operated by franchisees. Initially CarZ will operate about 50 dealerships by itself. CarZ has already received 300 enquiries for franchisee set ups. 

CarZ aims to penetrate Tier 1, 2 and 3 markets. It plans to recover the initial cost of investment in two months of operation in Tier 1 cities, and in four months from Tier 2 and 3 cities. 

There are about 19,000 multi-brand automobile workshops in India and in the franchisee model quality control is a major issue. 

CarZ plans to iron out issues that plague multi-brand workshops. For example, CarZ considers Toyota to be a benchmark in after sales service and will only hire technicians and mechanics who have worked with the Japanese car maker. 

CarZ also plans to set up a training centre for mechanics and technicians in Hyderabad.

Get latest updates on
the automobile community

Login Now

CarZ surveys the makes and models of cars in the proximity of its workshops and sources spare parts from OEMs on this basis, which reduces work time. CarZ’s headquarters expedites distribution of parts in Vijaywada, Andhra Pradesh. For accident repair jobs, it takes 12 to 48 hours to source parts.

Co-founder and Managing Director of CarZ, Venu Donepudi, says that one workshop will service 20 -25 cars in a day. “Customers can book a service slot over the phone, in case slots are full a booking can be made for the next day,” says Donepudi.

An equal pay scale compared to the OEMs has meant that not a single employee has left CarZ. 

On the customer satisfaction front, out of its 75,000 strong customer base only four percent claim not to be satisfied. CarZ offers extended warranty to their customers for a minimal premium amount starting at Rs 5 per day for cars under a six-year age bracket, that also includes roadside assistance.

CarZ has an understanding with Exclusive Motors and services Bentley, Lamborghini and Aston Martin cars. These high end car makers can send their technicians to CarZ workshops to service their vehicles. 

Given the multi-brand car service business potential in India, overseas companies like Midas, Maaco and AutoZone have shown an interest. Although it is still at a conceptual stage, CarZ may establish an agreement with Midas for electrical and mechanical work and with Maaco for body jobs.  

CarZ is on the right track with its knowhow in southern India to establish and operate an all-India network.