As the managing director of Maruti Udyog, Jagdish Khattar had proved his detractors wrong, and how.
An Indian Administrative Services officer, he had joined Maruti in 1993, and had become its managing director in 1999. Between 2000 and 2008, the company’s revenues more than doubled—Rs 9,000 crore to about Rs 22,000 crore—while profits rose more than five times, from Rs 330 crore to Rs 1,730 crore. Industry experts predicted that Maruti would have a tough time against global majors like General Motors, Ford, Fiat and Honda. But Khattar proved them wrong.
It is yet to be seen if Khattar can prove his detractors wrong, once again, with his four-and-a-half-year-old venture Carnation.
On January 3, 2008, 66-year-old Khattar turned entrepreneur, and started Carnation Auto. Although the initial idea was that of a multi-brand car showroom, over the past four years, Carnation’s business proposition has undergone multiple changes. And Khattar remains far from success: With a turnover of just over Rs 130 crore, the company is yet to make any profit. In fact, with a turnover of about Rs 81 crore in FY2011, it recorded a loss of Rs 52 crore.
A critical cog in Khattar’s efforts to make Carnation a success is the speed at which he can decide on a clear business proposition for it. From being a multi-brand dealership for new cars, it got into the business of multi-brand car service. Now, Carnation has ventured into selling used cars, and wants to sell accessories and insurance as well.
But what exactly does Khattar want Carnation to be?
From his recent moves, it can be said that he wants Carnation to deal in and service cars that are no longer covered by the manufacturer’s warranty. He wants a share of every rupee a car owner spends when his car is no longer new.
While success is still not guaranteed, this business plan gives Carnation a better shot at it.
In India, once a new car’s warranty expires (usually after two years of purchase), 65 percent to 70 percent car owners do not return to the manufacturer’s authorised service centres, and opt for the neighbourhood garage instead.
(This story appears in the 26 October, 2012 issue of Forbes India. To visit our Archives, click here.)
Worst place to buy a used car. I bought a car from here (Gurgaon near bus stand below TVS showroom), and they assured me that this car is totally checked by our technical experts and you will never face any issues. Just after a month engine oil consumption goes too high, when I checked my car I came to know that it`s engine goes down and company is claiming a bill of around 1 lakh. I call their advisor and experience was pathetic. I don`t know what kind of technical expert they have, who doesn\'t even know that car engine is in bad condition and they approve such cars.
on May 4, 2015Company full of liars ,the worst experience of my life.They took car one month back adit met with accident ( not major). I m continuously calling from 1 month .,everytime I call they give different n new reason. Every person at Gurgaon carnations branch gives new lie the time you call.They said ur condenser is damaged from last 1 month,then they said its old model so not available in market.they forced me to search on my own n tell them .i enquiry in vipul n they gave me no.of Alva auto spares Gurgaon.They said its available.I called then told its available m again after 2 days they told condenser is ok.Actually fan not working. I came to know from other person in carnation that they have repaired it n they r hiding from me.Senior Management doesn't pick ur calls n junior workers fight among themselves.They also forced me to visit carnations n talk which is far from my place.They kept my licence fot 20 days overturned after I almost forced them to do so.BIG NO TO CARNATIONS.IT'S BIG INEFFICIENT N TOTALLY Flop.i hope many r saved by this mail so only wrote my experience.
on Sep 27, 2014definitely he is going to win the challenge because he has shown his ability in the past. The good thing is his opinion is straight forward which includes purely truth, trust and tremendous task.
on Apr 17, 2014Carnation service costs are the same as those of any company branded service outlet while at the same time their service is pathetic in comparison and they are never able to find replacement parts. I wonder how this company has sustained for so long. I took my cars there for service once and thereafter decided never to visit them again... yet they keep calling every few days to remind. Some cheek
on Mar 12, 2013This is great idea and am sure it is deliverable
on Nov 14, 2012This is good idea but need the mass reach across the country
on Oct 24, 2012