NEW DELHI: The government’s efforts at encouraging local manufacturing of mobile devices in India through lower duty seems to be working. Gionee, a key Chinese manufacturer which currently imports its devices here, has decided to assemble phones in India while planning a full-fledged factory over a three-year horizon.
Arvind Vohra, who heads Gionee’s business in India, said that the phone maker will firm up plans for local assembly in the next six months. “We will initially go in for a contract manufacturing model and will look to establish an independent manufacturing model over the next 18-24 months,” Vohra told TOI here.
The company, which sold 40 lakh devices last year on a turnover of Rs 2,750 crore, has mandated Ernst & Young for the job. “Volumes have been growing for us at a quick pace and we are looking to double our sales volumes in 2015 while looking at revenues of around Rs 5,000 crore.”
The government had thrown in sweeteners for local manufacturing in the Budget and there is an incentive of 11% when making in India against imports. The move has prompted many companies, including some importing from China, to look at making in India.
“We may look at investments of Rs 300 crore for setting up a factory operation here,” Vohra said.
Gionee, that earlier used to supply to homegrown major Micromax, had started operations in India in April 2013. Vohra, who has had stints in the mobile business earlier, owns 26% in the Indian venture.
He said that for having full-fledged manufacturing operations in India, there is a need to develop an eco-system comprising suppliers and other key partners. “As an industry, we still have some areas where we have to import critical parts.”
Currently, the company sources its devices from Gionee’s factory in China.
Xiaomi, China’s top mobile phone seller, has also said that it plans to start manufacturing of devices in India. The company, which operates in India through an online sales model, is also understood to be firming up plans for an assembly operation.
Samsung, the world’s top maker, has said that it will expand the production of mobile phones in India and these would include flagship devices like the Galaxy S6 and the S6 Edge.
Huawei looks at growth in India
Chinese manufacturer Huawei has said India will be a key market for the company as it beefed up its product profile with the launch of new devices.
The company, which launched two new devices under its ‘Honor’ range, said sales in India are moving at a quick pace and are expected to grow further this year. “Last year, we sold 3 lakh units of Honor devices and this year, we are looking at seven times growth in that number, at about 20 lakh devices,” Honor president George Zhao said.
The company unveiled two new devices under the Honor range—4X (priced at Rs.10,499) and 6
Plus (Rs.26,499), which will be retailed through e-commerce major Flipkart.
Source: http://timesofindia.indiatimes.com/business/india-business/Chinas-Gionee-looks-to-manufacture-in-India/articleshow/46680004.cms