Khattar’s final reinCARNATION

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 country.

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.

Customer 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 says.

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.

Plans 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 says

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!