Lenovo-Motorola looks to set up factory in India

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NEW DELHI: After selling nearly 10 million devices in India last year, Lenovo-Motorola combine plans to set up a company-owned factory in the country as it expands aggressively. The company is closely watching developments around the rollout of GST and prevailing tax structures before taking a final view on the matter.

Dillon Ye, head for Lenovo’s mobile business group that also includes the Motorola division, said the Indian market has been growing strongly for the company, prompting it to look at portfolio upgrades and fresh investments.

“We are looking at potential options,” Ye told TOI when asked whether the company will set up its own plant in the country, following in footsteps of compatriots such as Oppo and Gionee.

“We are studying the government policy carefully, such as rollout of GST.” The company currently sources a part of its requirement from contractmanufacturer Flextronics that makes the devices at its Chennai facility. Phones sourced locally include Moto’s E and G models and Lonovo’s K Series.

Flextronics has a capacity to supply six million devices annually, which significantly falls short of Lenovo-Motorola’s requirements. And, with the company expecting stable growth over coming years, there will be greater need for local procurement. The government has provided fiscal incentives for devices being manufactured locally and current benefit for ‘Make in India’ products is roughly 12.5% (lower duty) when compared to sourcing the same from overseas. The benefit has even prompted Apple to look at local manufacturing.

The company is all set to manufacture from a plant in Bangalore and is understood to have given the contract for the same to Taiwan’s supplier Wistron. Local benefits have also prompted other Chinese makers to start sourcing in India.

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