Logix software fuels automobile trade

Online purchases are a way of life today and things like checking out your new car without actually trudging all the way to a crowded dealership are now very much possible. The Bangalore-based Logix Microsystems Ltd's automotive portal www.carazoo.com with interactive animations (for new cars) makes click-and-buying a car easy. Other highlights include used cars, each with historical data, helping the online visitor search, view and shortlist before going to the dealer.

According to Sanjay Soni, MD, Logix Microsystems Ltd, “the potential for this line of business is very significant. Logix has spent more than Rs 4 crore in building the portal. We will break even on Carazoo by the end of this quarter.”

“Logix is growing organically and inorganically. We have completed three acquisitions in the US in 2007, plan a couple more this year and also enter the European market. Our goal is to be a US$ 100 million (Rs 400 crore) company by the end of FY 2010,” says Soni.

He says the acceptability of Carazoo has been very good. “We are currently getting 200,000 unique visitors a month and are generating approximately 250 enquiries per day. Carazoo has achieved this in spite of very low advertising (mainly online),” he adds.

Carazoo commenced operations in August 2007 and currently covers eight cities (Delhi-Gurgaon-Noida, Mumbai-Pune, Bangalore-Chennai-Hyderabad) which cover 77 percent of new car sales in India and also account for a major percentage of the broadband connections in the country. Dealer subscriptions and commissions from leads provided to dealers are the major revenue sources. Thirty other cities are to be covered in Phase 2 by May-June 2008.

Logix also plans to market the THISS hybrid sales training program to automobile dealers in India so that their personnel are able to convert a higher percentage of online leads into vehicle sales.

Logix's main source of income, however, is from the sale of its products under the IzmoCars brand name to over a 1,000-strong clientele comprising automotive dealers, manufacturers, newspapers and portals in the US automotive market. The product has been recently launched in the Indian market.

“The most promising segment for our software products continues to be automotive. We are launching a real estate product in the international market, which could also become a big revenue generator in the years to come. Nearly 90 per cent of the company's revenues come for software products.

“Carazoo.com was a natural extension since Logix has very strong expertise in the automobile domain and experience in the US market which it can leverage,” says Soni. While Logix has 320 employees in India, most of them involved in the software product development division, Carazoo has a dedicated team of 12 staffers at present.

Soni says that internet-based models like his will be successful but the major barrier is the lack of broadband connectivity and customer ignorance. “However, they will eventually appreciate the advantages of the internet-based model where a consumer can experience virtual touch and feel of a car, paint a car in all available colours, compare various cars in a segment and save time, effort and money by avoiding visiting multiple showrooms.” Furthermore, car buying becomes "hassle-free" with the purchase greatly facilitated by the portal which also provides information on car finance, insurance and accessories.