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Multi-brand automotive sales and service firm Carnation Auto is embarking on an expansion drive for its pre-owned car vertical with plans to open 200 showrooms by 2015-16 across the country.
The venture, a brainchild of Jagdish Khattar, the former Chairman and Managing Director of Maruti Suzuki, is adopting a 'cluster' approach through franchise for its network expansion strategy.
"There is a huge growth in the used cars industry in the last few years compared to the new cars segment. With the entry of more organised players in the segment it will further increase and we are set to tap this potential," Carnation Auto Managing Director & CEO Jagdish Khattar told PTI.
When asked about the company's expansion plans for the pre-owned car business, he said: "We will have over 40 showrooms by end of FY14 and by 2015-16, the plan is to have around 200 showrooms."
The company, which today opened its latest showroom at Noida that has a capacity to display over 100 certified cars, at present has a total of 33 showrooms.
When asked about investments, he said: "Most of these showrooms will be franchises, we will have only about 15-20 company-owned showrooms. So most of the major investments will be done by our partners."
Khattar said the company is adopting a cluster approach under which it opens expands network in smaller locations around a major hub, such as Delhi-NCR, Mumbai and Pune.
"We will have franchisees even in smaller towns. Certified pre-owned cars are having increased acceptability and is growing at the rate of 18-20% while the organised sector is witnessing a growth of 40% annually," he said.
Carnation Auto will sell both mass segment as well as premium cars at its pre-owned car outlets, he said but added "about 60% of our sales come from the hatchbacks above entry level such as WagonR, Santro or the i10".
The company also has 15 multi-brand auto solution hubs located across India, including Mumbai, Delhi, Gurgaon, Pune, and Bangalore, providing facilities like car service and repair, warranty processing, cashless insurance claims and after sales support.
