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‘We’re just giving the customer a credible choice’
As the chief executive officer of Maruti Suzuki India Ltd, Jagdish Khattar was the most recognised face in a sector that thrives on glamour and glitz. While creating a space for himself, he is not looking to disrupt or dislodge existing dealers, he said in an interview with Sumant Banerji.
As the chief executive officer of Maruti Suzuki India Ltd, Jagdish Khattar was the most recognised face in a sector that thrives on glamour and glitz. Eight months after launching Carnation Auto, an organised, multi-brand platform for providing automobile service, sales, spare parts and accessories for the consumers, Khattar is trying to make a mark as an entrepreneur. While creating a space for himself, he is not looking to disrupt or dislodge existing dealers, he said in an interview with Hindustan Times. Excerpts:
On the business idea
As the chief executive of Maruti, I realised that on an average consumers are not happy with the service that they get from authorised dealerships, mainly due to lack of transparency. So as the warranty period expires, 60 per cent customers move to roadside garages.
There was a gap that needed to be filled. In other countries, third-party organised service networks already exist. I started thinking about this in my last year in Maruti.
On investments, break even
We have two major investors — Azim Premji's Premji Invest and IFCI. So far we have invested Rs 100 crore — Rs 80 crore from Premji and the rest from IFCI. We have also secured a loan of Rs 170 crore from Punjab National Bank.
We are loooking at cash neutral positions at all our outlets within six months of starting operations. Our Noida outlet, which began in June, is close to that.
On Carnation’s impact on dealers
Dealers or companies that are efficient need not be worried. At the end of the day the customer will decide where he wants to park his car. We are only offering a credible, cost-efficient and transparent option.
On the experience so far
So far we have just 13 outlets in 8 cities. We have serviced around 30,000 cars, 75 per cent of which were earlier going to authorised dealerships. We can’t compete with the roadside mechanic on cost, just like he can’t compete with us on quality.
On the company’s overall vision
The vision was always to provide a one-stop shop to a car owner that caters to all his needs. Once he is at a Carnation outlet, he will not need to go anywhere else for anything — accessories, insurance etc. We also launched the workshop on wheels, so the service can happen at your doorstep. I think this will be a game-changer.
On possible competition from new entrants
According to our estimates, the service and spare parts market requires fresh investment of Rs 15,000 crore by 2013-14. I am sure some companies will look at options like ours to expand their presence in the country.
