Jagdish Khattar's RE-In’CARNATION’- Plans to setup 100 'multi-brand auto solution hub' in 3 years

The Ex-MD of Indian's largest automobile manufacturer Maruti Suzuki is certainly living life in the fast lane these days. After steering the Japanese manufacturer to extreme heights, he had retired after his term came to an end. Even then, he has taken up a new initiative to stick to this field by getting into Automobile service hubs in India on a large scale.

Jagdish Khattar, now armed with funds from Premji Invest and IFCI Venture Funds, the former chief of Maruti Udyog, is planning to open 100 “multi-brand auto solution hub” in three years. This is a very ambitious move even under times of recession, but we think that Khattar has more than sufficient knowledge to excel in this undertaking.

His plan begins with the first twelve outlets of the entrepreneurial venture – Carnation Auto India Ltd – which are already under implementation. “The first set of these will come up in Kochi, Chennai, Bangalore, Hyderabad, Amritsar, and two in Noida,” Khattar told The Times of India. “Our first outlet would be opened before March,” he said.

Carnation is a third party multi brand car service provider. It will sell tyres, batteries, car detailing, insurance and other four-wheeler related items, apart from servicing cars. Each unit of Carnation will have 20 to 40 work bays, with each bay capable of handling three to four cars a day.

Jagdish Khattar’s plans are to open 25 outlets in 2009-10 and take it to 100 in three years. Premji Invest has invested Rs 80 crore and IFCI has put in Rs 28 crore in the business as equity.This shows the mount of faith the firms have instilled in Khattar.

Even as he is in talks with car manufacturers, none of whom have formally committed any support to the venture by way of making available spare parts, Khattar said, “if you ask me, it is a question of time before they accept the idea. They all tell me it is conceptually good, but want to retain servicing with their authorized outlets under their control.”

In order to ensure easy availability of spare parts for Carnation, Khattar has dispatched his teams to Dubai, Bangkok, Taiwan and Shanghai. “We have found out that roughly 80 of spare parts are available in the local or international market and we will start importing them,” he said, hinting that the venture can be prosperous even without the support of the car makers.

"Between Maruti, Hyundai and Tata, they control 80 of the Indian passenger car market. My first target is to get other manufacturers, which by itself will mean big business,” he said. Khattar sees an opening even in the auto sector slowdown, which is pushing many dealers on to the brink of closure. “We keep getting offers from existing car dealers who want to sell out. We are in negotiation with many of them,” he said.

The tumbling real estate prices are also assisting his business plans. “We were negotiating a place for our Carnation unit in Noida, a few months back. They asked for Rs 30 a square feet and we didn’t take it up. Now the same place is being offered at Rs 19,” Khattar said.

Going forward, Carnation will get into selling new cars and also preowned cars.This will be the future as multi brand car outlets are the way in this highly combative world. Speaking of which, we do know that Ex-Hyundai man BVR Subbu is also working on a similar concept after news broke out that he had bought the now-defunct Daewoo's factory to make his own small car and sell it.

For more details, visit Carnation

IAB

Source : Times of India