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|16th December 2016, 19:47||#1|
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Carnation might get into the spare parts business
Used car sales and services firm - Carnation Auto is reportedly planning to enter the automotive spare parts business. This is part of Carnation's plans to spread its verticals into different automotive segments.
Carnation Auto, formed in 2008 by a former managing director of Maruti Suzuki, started operations with a capital-intensive model through company-owned used car dealerships. A couple of years later, the firm dumped this model and adopted the franchisee route. Carnation has also set up a dedicated service network, which is also being operated via a franchisee business model.
The company is now seeing an untapped potential in the spare parts business. As a result, the firm is planning to launch a range of Carnation branded spare parts by the end of FY 2018. As per current plans, Carnation won't manufacture the spare parts, and will rather source them from tier-II and tier-III component suppliers. These parts will then be sold under the Carnation brand.
Carnation claims that its experience in the car service domain from the past 8 years has helped it to recognize a few fast-moving spare parts that have substantial requirement in the market. The company will thus likely be starting with these fast-moving spare parts, before expanding its portfolio to less popular spares.
Carnation currently has presence in Delhi, Rajasthan, Uttar Pradesh, Gujarat and Maharashtra. The company recently clocked 100 franchisees, and is expecting to take the number to 150 by March next year. Carnation is thus planning to take advantage of its widely-recognizable brand name to enter the spare parts business as well.
Source: Business Standard
|19th December 2016, 13:52||#2|
Join Date: Feb 2004
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Re: Carnation might get into the spare parts business
I don't think it's going to have any kind of impact in the market, or even on Carnation's own financials. The company is in bad shape. Non-OEM spare parts succeed only on distribution and I doubt Carnation has the muscle to make that happen.
Here's a good article - The humbling of Jagdish Khattar
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