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Home / Companies / People /  Jagdish Khattar’s contribution to Maruti was invaluable but his legacy is checkered

Jagdish Khattar who passed away on Monday was a quiet, unassuming IAS officer-turned business manager, who made a great success of his stint as managing director of carmaker Maruti, but failed to produce the same results with his own start-up Carnation Auto. A career bureaucrat in 1993, he was co-opted to the auto major and then in 1999, to the unenviable job of following in the footsteps of legendary managers like R.C. Bhargava who had retired as MD in 1997. This, at a time the Indo-Japanese auto-maker was in the throes of intense competition as well as simmering tensions between the two equal partners in the joint venture. It was to his credit that coming in as a representative of the Indian government, he stayed on as a nominee of Suzuki Motor Company.

When he finally left office in 2007, he decided to turn entrepreneur, setting up a brand-agnostic, pan-India sales and service network for cars. Though sound in principle, the concept never really gained ground, and despite the backing of stable investors like Premji Invest and Gaja Capital, the venture failed to make much headway. By 2019, the company was deep in trouble with the Central Bureau of Investigation filing a first information report against him for non-payment of dues to Punjab National Bank. It was a sorry end to what had seemed a promising third career for Khattar, at a time most people in his position would have settled into sinecured retirement.

Indeed, Khattar’s career reveals a strange paradox. After graduating from St Stephens Delhi and earning a law degree, he embarked on a predictable career as a civil servant. Coming into Maruti, a government-controlled company that operated successfully in a sector which had been thrown open to multinationals in 1992, Khattar then excelled as a manager and a business leader, receiving several accolades including being named the Ernst and Young Entrepreneur Manager for the year 2003.

Yet, when it came to leading his own venture, despite coming from a family of businessmen, Khattar floundered, making several strategic errors of judgment. Thus, Carnation Auto rapidly expanded its network across the country, before he realized that car companies were neither interested in seeing their vehicles share display space with rivals, nor were they keen to give their spare parts to anyone outside their own workshops. He also misjudged the cost of doing business, overspending on renting expensive properties to set up the workshops. The result was Carnation found itself competing against roadside workshops on price and against company-owned workshops on reliability. By the time the start-up pivoted (for the third time) to selling cars online, it had already been overtaken by a rash of newcomers like CarDekho.

For a man who wore several hats through his professional life, Jagdish Khattar will be remembered for his successful tenure as MD of Maruti, when it overcame labor unrest as well as intense competition to retain its leadership in the market. While its market share slipped in that period from the high of 80%-plus in the early 1990s to a more reasonable 40% by the time he was done, Khattar steered the company with intelligence and a commitment unusual among bureaucrats on secondment to private companies.

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