CarZ was founded in 2008 by two auto enthusiasts & experts, Mr. VenuDonepudi and Mr.Vijay Gummadi, who returned to India after a long stint at US, Europe and Middle East working at GM and Chrysler. With a cumulative global experience of more than 25 years in the automotive field, Venu and Vijay found a gap after a thorough market research and started up Carz- a full range of repair services for all makes and models of cars; these services are offered in neighborhood locations and offsites by mobile service vans. Their first service outlet was operational in the year 2010 in Hyderabad and since then,CarZ has forayed across 14 major cities in Andhra Pradesh and Karnataka and are now a serious force to reckon with in the multi brand car network. I caught up with Venu Donepudi to learn more-Expanding into 14 cities in 2 states since 2008; how did it happen? Was there any difference in terms of setting up in different states?
Founded in 2008, we have been operational since February 5th2010. CarZ has totally 14 service outlets spread across Andhra Pradesh and Karnataka, employing 300 employees, with plans of a nationwide rollout of 300 service outlets by 2018, with 9,000 plus employees. We still have a long way to go in terms of achieving that landmark figure, however slowly but steadily we are progressing and seeing growth in our outlets. The expansion has been planned and researched thoroughly in each of the cities we enter, understanding the local demography, the market potential and the acceptability of our offering.
Definitely the influence of huge cultural and demographic factors needs to be considered when we enter any new marketor state. We hire locally, so that we can connect to the local needs and address their requirements much better. Our format and services offered are standard across the country; however the ways we approach each market and address our customers vary.
Going ahead, which is the immediate state for expansion? How will the franchise model work? And on what basis will the franchise be granted?
The CarZexpansion plan will be primarily focused to South India for the current financial year (2012 -2013), and we look to add 26 more service outlets across AP, Karnataka, Kerala, Tamilnadu, Orissa, Maharastra & Goa.
After the study of the market this year, the company is planning to open 2 franchise outlets this year, and will study theirperformance before opening further outlets in the next financial year.
For a business model like ours it’s imperative that we expand via franchise model. This will help provide the necessary depth and reach that we are looking for, which through a sole company owned outlet is difficult to achieve. There is a huge addressable market out there and the only way to reach them is by using the local know how and expertise that these professionally run Franchises would bring to the table.We select our franchisees very strategically, so that we can give support to them when they join.Business or retail experience, proven management skills, and a strong financial position are ideal for one’s success as a CarZ franchisee. Employment of experienced technicians is also crucial for being able to provide excellent service; a stint with Toyota counts. CarZ will look for franchisees that will be complement their service offering with local knowledge and expertise.
Tell me a bit about the revenue model and how long does it take for a center to break even?
Royalty from our franchisees is one of our regular revenue streams, apart from the car servicing done at CarZ company outlets. Our franchises are treated as our own center, hence better their performance higher the royalty we earn.
With the centers we have opened till date, we have been able to achieve operational break even at the unit level between 2 – 4 months.
Elaborate a bit more on the CarZ mobile squads.
Our CarZ mobile squad van caters to handling minor repair works for our customers at their doorstep. CarZ also offers express and mobile service to customers for their convenience, where one can get their car picked up from their doorsteps at night and get it back (in case of minor maintenance repair) the next day before office at no extra cost.We are also planning a 24/7 service by adding night shifts, whereby the customer can give his/her car in the night for servicing and get it delivered the next morning.
How is the competition in this field and what is the USP for CarZ?
Yes we have competitors in this space which include dealers, local garages operated by independent mechanics and other multi-brand players.There are 5 P’s as part of our USP:
1.) Place: Convenient neighbourhood locations
2.) People : Highly skilled, experienced and multi talented manpower
3.) Parts : Genuine aftermarket parts
4.) Process : Defined process to provide quality service
5.) Price : Competitive price
Having an online presence is very important in this age. What are you plans here?
We understand the importance of being present online as a majority of our target group is present online across various social media platforms, forums, blogs and online portals. We have made substantial investment across social media platforms in terms of ads and have hired some of the best talent to manage our online presence, and we are seeing positive returns, which has further fuelled our interest in investing more.
Our online plans for the future would be to create a strong platform where our customers would be able to request for our services online and get real time updates on the servicing.
Find more about them here: http://www.carzcare.com/