He is well past his 60 years of age but
is as agile as a young man in his twenties, brimming with ideas and enthusiasm.
Jagdish Khattar, Chairman and Managing Director of Carnation is just back from
a lunch meeting with ex- Stephanians. He was told by a CEO of a company that he
was keen to utilise Khattar’s workshop on wheels service for his company’s
fleet of cars. Almost immediately the phone rings and it’s the Delhi Police
Commissioner on the line. He wants his department’s fleet of vehicles serviced
by Khattar’s workshop on wheels engineers. Khattar’s workshop on wheels
business model has become a major hit among individuals and corporates across the
And that is just one of the businesses
that his company Carnation is into. A bigger surprise is just round the corner.
His son Kunal Khattar is working furiously on an ambitious project, an
e-business portal that would further enhance the scope and might of Carnation. Kunal
is the Vice President – eBusiness & Strategic Alliances at Carnation. The e
business will start from next quarter. Khattar says the business he caters to
is just the tip of the iceberg. There’s plenty of areas to be tapped and plenty
to deliver to the customer. Well spoken for a person who was at the helm of
affairs at Maruti Suzuki and who took customer services to dizzy heights.
So was Khattar’s Carnation idea
conceived much in advance before his term got over in Maruti? “After my
contract with Maruti got over I was not keen on extension. It meant that you
continue doing the same thing. I didn’t wish to continue because I didn’t want
to retire. I am not in favour of retiring. In any case Mr Suzuki wanted me to
continue. I said no since I wanted to do something of my own. Besides that, I
had been a CEO for nearly 8 to 9 years. The opportunities in India are so huge
and everyone was talking about Indian opportunity so I thought why not have a
go at it. In fact my company was registered within two weeks after I left
Maruti. I said bye-bye to Maruti on a Friday and the following Monday I was in
Mumbai and the first three people I met joined me and in the next 6 to 8 weeks
we completed the formalities,” Khattar tells Motown India
According to him his business plans have
changed since he started Carnation. The broad picture remains the same. He says.
“I was told that whenever you start something like this, it keeps evolving as
you go along. In fact Kunal was the one after me for five years urging me to do
something of my own. Kunal is working on an e-business portal. It is one of our
verticals,” he says.
“There are a dozen portals here today
but they all are digital. No one has a brick and mortar on the ground. We would
be the only one to probably have a digital and brick and mortar on the ground.
That’s a very strong combination. In our case we are already in 15 cities. We
have 23 locations. So the prospective customer can see things on the net and
can also walk into a hub of ours and see the products and feel it. So that
would give a better assurance to the customer. As for multi brand car sales, we
will go in for new cars in our e-business,” he adds.
Is the Key To Business Success
One major thing that Khattar learnt in
Maruti was that if one looks after one’s customers everything else falls in
place. His business model is really for
the customers, he claims. The Carnation business model started with the premise
that there is a need for multi brand, there are families with more than one car
and the number of cars sold in India is so huge that the service network is not
matching it. Then there are huge leasing firms and corporates whose huge fleets
need to be looked after.
“The last 18-19 months we have been here,
these have been validated by every customer we come across. The most important
is customer focus and customer need and every day you need to work to meet that
need,” he points out.
Workshop on wheels started when Carnation
was a group of six or seven in a small office in Nehru Place. Now the company
has 40 on the roads. The response has been huge, according to Khattar. “All our
23 hubs have this workshop on wheels. Some cities have five because there are
three hubs there. We are in the process of building the data base, the
awareness. One of the reasons why we are not expanding so rapidly is because I
want my systems, my processes, my backend, my SAP and everything in place,” he
Khattar recalls his days in Maruti when
his company sold new cars to NRIs staying in America and other places. Anyone
staying abroad could gift a car to their loved ones in India. The scheme was on
for 12-14 months. When he left, Maruti was selling around 200 to 300 cars a
month. Some used to gift it to their parents while husbands used to gift it to
their wives. To Khattar it was a connect with the customer. Maruti dealers used
to go to the villages to give the car to the customers with a lot of fanfare
and the parents used to be thrilled that their son based overseas had gifted
them a car.
Carnation’s tie up with Magneti Marelli
is in final stages. It will sell spare parts for all cars. The venture will be an
independent company along with Magneti Marelli. The parts will be sold through
distributors and stockists.
100 Hubs In Next Few Years
At present Carnation has around 1700
people involved in the business. In a couple of years Khattar is hopeful of
setting up at least 100 hubs across India. “My view is to have a couple hubs in
every city and these become the base for mobile workshops. Five mobile
workshops is equivalent to one hub. Each mobile workshop is two bays. It is
efficient because you go where the customer is. It is far more productive and
you do not have the cost of land or building. Today in Noida we have five
workshops. We have two hubs and a third is in the form of these five workshops.
It is a huge customer convenience,” he notes.
Khattar says that in the Noida sector
where he stays, his company did 140 check ups in two days. There was a huge
queue of cars. They did preventive maintenance, oil and filter change and wheel
balancing. “If there is a bigger problem we take it to the hub. We have fixed
up with a time table. For example this building is every third Monday. People
are aware of it and they get the car serviced. The plan in Delhi is not to have
hubs but only mobile workshops,” he says. The workshop on wheels basically consists
of Versa vehicles with a lot of relevant equipment. Now of course the vehicles
being bought are the Eeco vehicles from Maruti..
Currently Carnation has 23 hubs, around
6 second hand outlets, 12 accessory outlets at 9 locations and has started
insurance renewals, besides operating 40 mobile workshops. The company has still
to decide on the franchise model of business as it involves control and
quality. “It should not be a routine franchise where we just give our name”, he
The customisation business is yet to
take off in a big way. Khattar says that his company is still trying to learn
customisation. “The DC business (the company had tied up with auto stylist
Dilip Chhabria) is okay. We are working in only Delhi and Bangalore. We are
offering only packages. I have not come here to simply do numbers but to create
a business idea that the customers need. There are challenges in it. This is an
important model for the industry. Every industry must see that the customers have
a wider choice. If the customer starts having good faith in Carnation and good
experience with the company and he thinks that there are so many things
Carnation can do for him, it will be good for us,” says Khattar.
To keep its fund part on the right
track, Carnation has taken a loan from PNB worth Rs 170 crore, and funding from
Azim Premji Rs 80 crore and IFCI Rs 28 crore. The company has invested a lot of
money on SAP. It has outsourced its customer requisition, customer feedback,
HR, finance, supply chain to another company. “That’s huge investment but huge
things have been taken away. We are concentrating on our core activities. We
are now in the process of consolidating,” he notes.
“We have challenges. In Gurgaon there is
no skilled labour. All people living there originally have sold their land have
become rich. Now our technicians are coming from 40 kms away. I am thinking of
setting up a dormitory for them,” he says. Khattar is excited and enthusiastic,
taking on these challenges. Now that is proof enough that Khattar indeed is as
agile as a 20-year-old!
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