Maruti Suzuki’s former managing director and chief executive officer (CEO) Jagdish Khattar on Wednesday said that Carnation Auto, his recently launched multi-brand auto solutions venture, is looking to sell second-hand cars in the outlet apart from accessories, services and spares solutions that it provides. The company will add 91 more such outlets throughout the country within the next four years.
“We are looking to sell used cars in our Carnation outlets in the near future,” Jagdish Khattar, chairman and managing director of Carnation Auto, said. He added that only 10 per cent of the 1.4 million second-hand cars sold every month in India is through the organised sector – with used car outlets, Maruti True Value and First Choice – a joint venture between ICICI Bank and Mahindra & Mahindra.
Carnation Auto group chief financial officer Deepak Singhal added that the company will start selling used cars sometime in this financial year, adding 30 more outlets by the end of the same period. “For the present year, we expect revenues to be Rs 75 crore. We hope to attain break-even point by the third quarter of the next financial year,” he said.
The company is taking the joint venture (JV) route in the expansion of its Carnation stores, as opposed to the franchisee route to set up the 91 stores across the country. “In having joint ventures, you have more control over the units. We are entering into the JV route with various states with a 51 per cent share, because of their skills and local know-how.
We are not building on the authorised franchisee route,” Khattar said. He added that the company only intends to service and sale cars in the Rs 6-8 lakh range.
Khattar added the company is looking to make its own spare parts under the Carnation brand, for which the company has already started to source components from Thailand and Taiwan. “We will be going in for car customisation as well in the future, apart from working on an e-business project,” he added.
Source: Financial Chronicle