Online auto repairs

Good Under the Hood

Car mechanic repair an engine.
Mecahnics don't always have a great reputation for honesty. Source: Getty

There’s a joke advert for an auto repair workshop doing the rounds on the internet. It reads: “If your car sounds like…” and then lists several options with prices. “Thud-thud-boom: $20; Ping-click-click: $50; Clunk-clunk-whine: $100” and so on.

The gag sums up the often distrustful and expensive relationship between car owners and workshops. But now, as with many other service sectors, the industry is getting a digital makeover.

One of the new online players in Germany is comparison site Caroobi. It aims to boost transparency and quality in the minefield-ridden market by connecting customers with garages.

And the Berlin-based start-up has some big – and surprising – backers. It has just collected a little over €10 million ($11.5 million) in funding from existing investors DN Capital and Cherry Ventures as well as the venture capital unit of BMW, BMW i Ventures. It’s the automaker’s first ever investment in a German start-up.

“Price competition isn’t our priority.”

Mark Michl, co-founder, Caroobi

Caroobi was founded in 2015 by Nico Weiler, 27, and Mark Michl, 25. Its 60-strong workforce in Berlin arranges auto maintenance and servicing at independent garages only. On average, the vehicles they handle are six years old, an age at which owners tend to stop having their vehicles serviced at dealerships that are tied to automakers.

One of Caroobi’s big selling points is that a customer can book a service at a fixed price without first having the car inspected by a mechanic. The company has 30 auto experts who initially provide a remote diagnosis to estimate the kind of repair needed. That’s not an easy job. Most car owners struggle to identify what’s wrong with their car, said one experienced industry expert.

That’s why competitors such as autoreparaturen.de and Autoscout24 focus more on standard services such as oil or tire changes and car inspections. Both sites work with several thousand workshops. Caroobi at present has deals with 400 of Germany’s 10,000 independent garages, and says it prefers quality rather than quantity.

The firm doesn’t just arrange repair appointments; it also provides other services for its partner garages, such as arranging spare parts and processing invoices for workshops.

“We relieve the garage of all its administration,” said Mr. Michl, who, like Mr. Weiler, previously worked at company incubator Rocket Internet. The pair had quickly noticed that many workshops still wrote their invoices by hand and lacked efficient order processes.

Garages have to fulfill some 30 criteria to qualify for inclusion on the company’s books, and Caroobi offers customers insurance for work done plus a guarantee of up to two years. “Price competition isn’t our priority,” said Mr. Michl.

The product and the team have the potential “to radically change the independent after-sales market in Germany,” said Christian Noske, a partner in BMW i Ventures. The fund was launched in 2011 to provide the group with access to tech start-ups and help it evolve from a pure automaker to an all-round provider of mobility services.

BMW Chief Executive Harald Krüger boosted its investment volume from €100 million to €500 million last year. It’s also interested in artificial intelligence and the digital behavior of BMW’s customers. That includes car maintenance, said Mr. Noske.

Unlike many digital companies, Caroobi plans to confine itself to the German market initially and optimize its procedures before expanding internationally.

 

Anja Müller writes about family and small- and medium-sized firms. Markus Fasse specializes in aviation and automobile industry news. To contact the authors: mueller@handelsblatt.com, fasse@handelsblatt.com

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