Chinese mobile phone giant, BBK Group, has announced plans to expand its smartphone production in India through partnerships with local manufacturers Dixon Technologies and Karbonn Group, according to insiders. These moves come in response to government pressure for BBK Group to work with local partners and take advantage of the production-linked incentive (PLI) scheme for phone manufacturing. Chinese smartphone companies have become wary of investing directly in their own plants for expansion due to increased scrutiny and allegations of various wrongdoings. This has made partnering with contract manufacturers already benefiting from PLI advantageous for BBK Group’s brands, such as Oppo, Vivo, Realme, OnePlus, and iQoo.
This expansion comes at a time when Chinese companies have faced increasing pressure in India due to border tensions and a desire from the government for Chinese mobile phone companies to undertake more value addition in India. Dixon Technologies is in the final stages of signing contracts for manufacturing with Oppo and Vivo, while Karbonn Group’s plant is already producing a limited number of handsets for Vivo and Realme.
While Oppo and Vivo did not apply for PLI benefits themselves, their partnership with contract manufacturers who have done so will allow them to remain competitive, particularly in light of Samsung’s PLI beneficiary status. BBK Group’s expansion in India is expected to bring significant production capacity, with monthly production expected to reach one million units in the Karbonn plant alone.
Dixon Technologies, which already manufactures smartphones for Samsung, Motorola, and Xiaomi, expects to begin production for two major global mobile phone brands in the coming months. The company anticipates substantial volumes from these new partnerships, which include a top-ranked brand in India and a very large global brand that requires specialized manufacturing lines.
With Chinese brands commanding a 74% share of India’s smartphone market in 2023, these moves by BBK Group demonstrate their commitment to maintaining a strong presence in the Indian market amidst rising competition and geopolitical challenges.
(Source: Economic Times)
FAQ Section:
1. Why is BBK Group expanding its smartphone production in India?
BBK Group is expanding its smartphone production in India in response to government pressure for Chinese mobile phone companies to work with local partners and take advantage of the production-linked incentive (PLI) scheme for phone manufacturing. This allows BBK Group’s brands, such as Oppo, Vivo, Realme, OnePlus, and iQoo, to remain competitive and benefit from the PLI scheme.
2. Why are Chinese smartphone companies partnering with contract manufacturers?
Chinese smartphone companies are partnering with contract manufacturers in order to expand their production without directly investing in their own plants. This strategy has become advantageous due to increased scrutiny and allegations of wrongdoings faced by Chinese companies. Partnering with local manufacturers who have already benefitted from the PLI scheme allows Chinese companies to maintain their presence in the Indian market.
3. Which local manufacturers is BBK Group partnering with?
BBK Group is partnering with Dixon Technologies and Karbonn Group, both of which are local manufacturers in India. Dixon Technologies is in the final stages of signing contracts for manufacturing with Oppo and Vivo, while Karbonn Group’s plant is already producing a limited number of handsets for Vivo and Realme.
4. What is the expected production capacity of BBK Group’s expansion in India?
BBK Group’s expansion in India is expected to bring significant production capacity, with monthly production expected to reach one million units in the Karbonn plant alone.
5. What brands are already manufactured by Dixon Technologies?
Dixon Technologies already manufactures smartphones for Samsung, Motorola, and Xiaomi.
6. How much market share do Chinese brands currently hold in India’s smartphone market?
Chinese brands command a 74% share of India’s smartphone market as of 2023.
Definitions:
– Production-linked incentive (PLI) scheme: A scheme provided by the Indian government to incentivize and promote local manufacturing of electronic devices, including smartphones.
– Contract manufacturers: Companies that specialize in manufacturing products on behalf of other companies, often under a contract or partnership agreement.
– Geopolitical challenges: Challenges related to the political dynamics between countries, such as tensions between India and China, which can affect business operations.
Suggested Related Links:
– Economic Times
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