Carnation Auto on an expansion spree after raising Rs. 190 crores

Carnation Auto, an initiative by ex-Managing Director of Maruti Suzuki Jagdish Khattar, is set to grow further with an investment of Rs. 190 crores. This sum came from investors like Gaja Capital Partners, Premji Invest and IFCI Ventures. Khattar has declined to state his share in the company or that of other financial investors.

At present, Carnation Auto, which started in 2009, operates 24 multi-brand service points, 17 second-hand vehicle dealerships and more than 50 mobile workshops. Currently, its dealerships are in 16 cities, such as Jalandhar, Ludhiana, Chandigarh, Noida, Gurgaon, Mumbai and Chennai. Though all these outlets are run by the company itself, Carnation Auto will opt for the franchisee model in the next phase of expansion. It will also work on enhancing its presence over the Internet in order to harness the potential of the online car retail business. In the next phase of growth, it will also expand its service portfolio and may provide insurance services from its outlets.

This multi-brand auto sales and service network has been received favourably in the market as its client base includes not just individual car owners but fleet operators as well. On this Khattar said, "The independent multibrand concept is now well accepted and will grow further." He continued, saying, "There is tremendous opportunity in the business and we are servicing cars from various brands at our outlets." The operating profits of Carnation vary from location to location, said Khattar.

However, the company has been facing challenges of its own in the industry, as a few manufacturers do not retail authorised components to service centres outside their official dealership network. Nevertheless, Khattar believes that this is not a major issue as parts for models produced by major car makers are easily available. He says that only a few companies try to restrict the supply of components. The Competition Commission of India is already looking into this matter.