Carnation Auto, the multi-brand automobile sales and service network, which inked an alliance with Magneti Marelli last December targeted at servicing premium cars in the price range of Rs 10 lakh and above, plans to enter into a formal joint venture with the Italian major. Jagdish Khattar, chairman and managing director, Carnation Auto, told Autocar Professional that this will be "formalized soon". The new JV, even though a separate company, will be similar to Carnation and will also use its facilities. Khattar says, “We will sell aftermarket service and spare parts across the country. We will also set up workshops for premium cars.” Khattar says the exact equity structure has not been worked out so far. At present, the Italian company helps Carnation Auto by providing advanced tools, equipment and spare parts. For Magneti, the alliance has offered an opportunity to gain market insights from Carnation’s national network. The new joint venture, says Khattar, will sell aftermarket service and spare parts across the country and also set up workshops for premium cars. Clearly, Carnation is keen to tap the branding strengths of the Italian major as it aims for a greater push in the Indian market. Even as Carnation, which was set up in July 2009, works on its proposed JV, it is working on its plans to have a pan-India presence. “We have already 18 hubs operational across India – one each in Amritsar, Gurgaon, Kochi, Bangalore, Karnal, Jallandhar, Surat; two each in Chennai and Noida; three in Mumbai and four in Hyderabad. There are six more hubs in the pipeline which will be operational in the next three to four months in Ludhiana, Pune, Jaipur and Bangalore,” Khattar says.
He inaugurated Carnation Auto's 19th hub in Chandigarh last fortnight, which will be followed by one in Sahibabad in June. Aware that the need is for trained manpower to handle cars that are increasingly
more technologically sophisticated, Khattar says his company has invested heavily to train technicians. While this is a challenge for old workshops, Carnation’s focus on training is aimed at being ready for the future given that demand for servicing is on the increase. Meanwhile, the company, which announced the launch of a wheels-on-wheels (WOW) initiative in which fully equipped vans will provide car detailing services, plans to increase the number of vans to 100 by the end of this year, from 17 at the moment.

The WOW initiative comprises a fleet of vans manned by trained personnel capable of servicing any car and even providing a warranty on parts replaced. In response as to whether Carnation is looking for additional funding, Khattar says the recent loan of Rs 170 crore which he obtained from PNB will suffice for now. Even as Carnation Auto opens more hubs, it has reportedly inked a five year deal with Genpact, the business processing oufit which will design and manage Carnation’s core processes, including finance and accounting, customer relationship management, procurement and supply chain management and human resources. Khattar has been quoted as saying: “Through this relationship, Carnation will transfer non-core support function activities to Genpact so as to have 100 percent focus on our core business of helping customers maximize their car ownership experience.”