In 2007, Mr. Jagdish Khattar quit Maruti Suzuki India Ltd. after an 8 year tenure as Managing Director and right after in 2008, he came up with Carnation Auto, with the idea of setting up Multi-brand car dealerships (for new cars) and service outlets across India. This idea was not taken well with all Auto OEMs as they denied sharing space under one roof and the idea never saw the light of the day.
After this, the business model was changed for Carnation and was pitched as for go-to service partner for cars on which heavy investment was done. But, Auto OEMs refused again to sell spare parts in aftermarket.
In 2009, in another change of business model, it was decided that selling of used cars will be a viable business which could become the fodder for the idle facilities. Accordingly, the business was built with the whole inventory, inspection and sales functions. In this process, Khattar missed the huge online wave which saw new players and used car ratings aggregators like OLX, Quikr, CarDekho, etc. which scaled very fast in short span due to huge funding. This helped Khattar realize that owning facilities is a bad idea and thus, came in the asset inspection business and Carnation Auto became an asset-light business.
The business is now facing bankruptcy and there is around Rs 100 crore of debt from its creditor, Punjab National Bank (PNB). The top investors of Carnation Auto are supporting the insolvency resolution and are open to give a resolution strategy. Mr. Jagdish Khattar will no longer be a promoter, he will surely help in rebuilding Carnation Auto if the new Investors will want it.
