Ex-Maruti man Jagdish Khattar aims high with Carnation

Will Jagdish Khattar's new game plan win against the neighbourhood garage?

As the managing director of Maruti Udyog, Jagdish Khattar had proved his detractors wrong, and how.

An Indian Administrative Services officer, he had joined Maruti in 1993, and had become its managing director in 1999. Between 2000 and 2008, the company's revenues more than doubled - Rs 9,000 crore to about Rs 22,000 crore - while profits rose more than five times, from Rs 330 crore to Rs 1,730 crore. Industry experts predicted that Maruti would have a tough time against global majors like General Motors, Ford, Fiat and Honda. But Khattar proved them wrong.

It is yet to be seen if Khattar can prove his detractors wrong, once again, with his four-and-a-half-year-old venture Carnation. 

On January 3, 2008, 66-year-old Khattar turned entrepreneur, and started Carnation Auto. Although the initial idea was that of a multi-brand car showroom, over the past four years, Carnation's business proposition has undergone multiple changes. And Khattar remains far from success: With a turnover of just over Rs 130 crore, the company is yet to make any profit. In fact, with a turnover of about Rs 81 crore in FY2011, it recorded a loss of Rs 52 crore.

A critical cog in Khattar's efforts to make Carnation a success is the speed at which he can decide on a clear business proposition for it. From being a multi-brand dealership for new cars, it got into the business of multi-brand car service. Now, Carnation has ventured into selling used cars, and wants to sell accessories and insurance as well.

But what exactly does Khattar want Carnation to be?

From his recent moves, it can be said that he wants Carnation to deal in and service cars that are no longer covered by the manufacturer's warranty. He wants a share of every rupee a car owner spends when his car is no longer new.

While success is still not guaranteed, this business plan gives Carnation a better shot at it.