“Almost all of the major Chinese smartphone brands will soon be made in India”, Steven Tseng, an analyst at Daiwa Capital Markets, said on Tuesday. This country has seen a huge rise in smartphone sales over the next couple of year, and actually has the potential to catch up to China at some point.
According to technology research firm IDC, Lenovo holds 6 percent market share in the rapidly growing smartphone market in India. A number of OEMs have already announced that they’ll start doing so, and some of them have already kicked off the project, like Xiaomi for example.
Flex, meanwhile, is serving orders for Lenovo and Motorola-branded smartphones in India through its own plant at an industrial park in the city of Sriperumbudur, near Chennai.
In December, FIH ceased production at its plant in Chennai, capital of the state of Tamil Nadu, as orders from Nokia, the facility’s primary customer, plummeted after the Finnish company was acquired by software giant Microsoft in April a year ago. “We have set our targets to six million this year and we will look at taking the production capacity to 12 to 14 million in the next year”, Dillion Ye, executive director of Lenovo smartphones, said. In fact the Chennai plant will be the Lenovos first production facility outside China which will be producing both Motorola and Lenovo products.
“The Indian Government’s thrust on “Make in India” has opened up a plethora of opportunities for organisations looking to conduct business in India”, said Amar Babu, COO, Asia Pacific and Chairman, Lenovo India.
India is now the world’s third market largest for smartphones, behind China and the U.S., according to analysts, and Lenovo’s handsets are gaining in popularity there.
India is a relatively bright spot for Lenovo, the world’s biggest maker of PCs, which has struggled with its $2.9 billion acquisition of Google Inc’s Motorola handset division.
In March 2015, Business Standard had reported that Lenovo is planning to start manufacturing near Chennai. It is also the only Chinese brand among top five vendors in the country.
Lenovo, the world’s largest PC maker, said 6 million smartphones will be made at the Sriperambudur unit this fiscal.
Babu said that apart from the ecosystem which is building around manufacturing in the country another reason which triggered the decision was the recent change in the duty structure. “It is just a matter of months before we are able to bring 30 percent of the key components needed for manufacturing locally in India”, he said.