After 14 long years of his association with Maruti Suzuki India, Jagdish Khattar plans to set up India?s largest independent multi-brand auto sales and service network that will see an investment of Rs 1,000 crore in next five year. The company called Carnation Auto India Ltd has been set up with an initial investment of over Rs 100 crore that includes Rs 80 crore investment from PremjiInvest and Rs 28 crore from IFCI Ventures.
A huge part of the total investment will go into Carnation Realty, its wholly owned subsidiary in the infrastructure space, which would buy key properties and land to lease it to the parent firm.
?Over 60-70% car owners move out of the service network of the manufacturer once the warranty ends and hence there is a huge opportunity to cater to the after-sales need of this segment. Moreover, since the whole segment is largely unorganized, Carnation Auto will initially start providing service and body shop and later move on to selling new as well as used cars,? says Khattar, chairman and managing director, Carnation Auto India.
The company, which is planning to set up shops at 100 locations across 65 cities in next five years, will initially set up stores at six locations before the end of this fiscal. ?We currently have three locations in hand and negotiations are on for another five locations. Hence, by the end of current fiscal, the company would open about six outlets in the National Capital Region, Hyderabad and Cochin. The number of stores will be later upped to 25 in the next fiscal,? Khattar adds.
In what could be a first of its kind, the company is eventually looking at sales of several brands of cars under one roof. ?Similar to Middle-East and especially Egypt, we will come up with outlets that would have separate showrooms with different brands, under one roof, and a common workshop to cater to after sales service,? he says without divulging further details.
The company plans to form six-eight joint ventures in major cities with local partners as minority stakeholders. ?Carnation has two joint ventures already on board and is in discussions with various others as this would help us to accelerate our roll-out operations,? he adds.
Beyond after-sales and service, the company is also looking at providing complete auto care solutions and has tied up with leading value added product and service providers for tyres, batteries, car detailing, accessorizing, CNG/LPG fitment and windshield replacement among other things.