Carnation eyes used car market, to open 160 outlets in 3 years

Multi-brand car service chain Carnation Auto, promoted by former Maruti Suzuki India chief Jagdish Khattar, is gearing up for an aggressive foray into the used-car market, with plans to open over 160 outlets across the country in the next three years.

Multi-brand car service chain Carnation Auto, promoted by former Maruti Suzuki India chief Jagdish Khattar, is gearing up for an aggressive foray into the used-car market, with plans to open over 160 outlets across the country in the next three years.

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"There is a huge potential for the pre-owned car market in India. On an average, about 1.3 used cars are sold for every new car sold in India. With a lack of organised players in the segment, the opportunities are enormous," Khattar, the charmain and managing director of Carnation Auto, told PTI.

As per Society of Indian Automobile Manufacturers (SIAM) data, domestic passenger car sales in 2011 stood at 19,46,373 units, up 4.24 per cent from 18,67,246 units in 2010.

Elaborating on the company's plans, he said the company plans to open over 160 outlets in the next three years, out of which 100 will offer service facilities and also serve as points of sale for used cars.

"The idea is that the company will own about 40 (service) hubs and about 30 pre-used car centres and the rest of around 100 will be on the franchise model. These numbers can change depending on the response," Khattar said.

Carnation Auto will provide all the verification, quality checks and certification along with insurance services to customers, he added.

Khattar said the company has already applied for an insurance broking licence and it would be in a position to offer the services through a tie-up with insurance firms soon.

Commenting on the potential of the used car market, he said: "This is a segment that will grow 20 per cent per year. Even now, in our service centres, 15 per cent of customers ask for exchanging old cars when they want to upgrade from a smaller to a bigger one."

Asked about the investment on the new business, he said it could be to the tune of Rs 40 crore. Carnation Auto has already invested over Rs 200 crore since inception on network expansion of its service centres across India.

It currently has 25 centres spread across 16 cities, spanning from Amritsar in the North to Kochi. The 26th facility is coming up shortly in Ludhiana.