CARAT is a new name in Hongkong for prestige motor cars, and even car enthusiasts are baffled. Kingsway Cars intends to change that and make Carat, by Duchatelet, the foremost name in luxury cars in the territory. Mr Frederic Duchatelet is a Belgian coach builder whose Mercedes-Benz conversions are already well known in Japan and Saudi Arabia under the name of Carat. Most people would say that a S-class Mercedes-Benz is grand and luxurious enough. But Mr Duchatelet believes that his craftsmen can improve on the best from Stuttgart, and Kingsway Cars is speculating that some Hongkong car buyers are prepared to pay for the extra opulence. According to the Carat's creator, the converted cars offer discreet elegance and trend-setting features ''to the discriminating taste of the modern businessman''. In layman's terms, the Carat offers more and better wood and leather and the attention to detail that only a great deal of money can buy. Supple Nappa leather replaces the standard Mercedes hide, panels of highly polished walnut or zebrano wood decorate the cabin, and thick wool carpeting dampens sound. Some designers are prepared to fit any gadgets and luxuries that the customer is prepared to pay for. But Carat accessories are strictly business-like and tasteful. Duchatelet does not offer a Jacuzzi or a mirrored ceiling. The aim is for a ''functional and comfortable environment without concessions''.