Carnation Auto aims to expand network on a large scale

Friday 08 November 2013, 11:59 AM by

Carnation Auto, one of the country's leading multi-brand automotive sales firms, has achieved good success in recent times. It has become increasingly popular for providing customers with excellent services, thereby making significant progress. Notably, Carnation also deals in the sale of pre-owned cars, something that it is hoping to expand in coming times. If reports are to be believed then the firm is planning to open around 200 outlets for pre-owned cars by the year 2015-2016. Reports have claimed that by embarking on this program, the firm plans to reach a high number of regions across the country.

The main person behind the success of Carnation Auto is Jagdish Khattar, the erstwhile Chairman and Managing Director of Maruti Suzuki, India's largest passenger car maker. According to him, the firm has adopted a cluster approach for facilitating expansion through its franchise. He spoke about the same in a recent interview, expressing the potential that exists in this area. "There is a huge growth in the used cars industry in the last few years compared to the new cars segment. With the entry of more organised players in the segment it will further increase and we are set to tap this potential," he was quoted as saying.

Carnation Auto seems to have pretty elaborate plans for expansion in the country, reports have claimed. According to sources, the firm is hoping to open around 40 outlets by the end of financial year 2013-14 and subsequently take the number to 200 by 2015-16. Recently, a showroom of Carnation Auto was inaugurated in Noida, Uttar Pradesh, signifying that the company's plans are in full flow. This outlet, opened in Noida, has a capacity to showcase around 100 certified vehicles. By opening this showroom, Carnation has taken its tally of outlets to 33.

Khattar, Chief Executive Officer and Managing Director at the firm, gave an insight into the investment regime adopted. According to him, only a handful of these proposed outlets are going to be owned by the company, resulting in a low level of investment. "Most of these showrooms will be franchises, we will have only about 15-20 company-owned showrooms. So most of the major investments will be done by our partners," he said.

Sources close to this development suggest that the cluster approach is likely to work for Carnation, wherein it would target small towns around commercial hubs like New Delhi, Mumbai and Pune. Recent reports have claimed that the rise in demand for pre-owned cars is quite steep and so is the need for a network of organisations that deal with the same. Also, a lot of people, in lesser developed areas, are becoming car buyers and due to low affordability, they are going for pre-owned vehicles. Sources suggest that the firm is going to deal in the sale of cars from both, mass and luxury segments. However, these pre-owned car outlets are expected to drive a major portion of their revenue from hatchbacks. Reportedly, 60 per cent of sales recorded by Carnation come from vehicles like Maruti Suzuki WagonR, Hyundai Santro and i10.

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