Huawei to make 3m smartphones a year in India amid high demand

Contract electronics manufacturer Flex to support Chinese company’s expansion in crowded US$16b domestic smartphone market

PUBLISHED : Friday, 23 September, 2016, 6:21pm
UPDATED : Friday, 23 September, 2016, 6:31pm

Huawei Technologies is gearing up to assemble up to three million smartphones annually in India by the end of next year, as the Chinese telecommunications equipment maker ratchets up its expansion in the world’s second-biggest market for the devices in terms of users.

The Shenzhen-based company said on Friday that its Honor-brand smartphones would be the first line assembled, starting next month, by contract electronics manufacturing partner Flex at its industrial park in Chennai, the capital of the country’s southern state of Tamil Nadu.

“We have been present in India for the last 16 years and as part of our India focus, we have been consistently expanding our footprint in the market,” Huawei India chief executive Jay Chen said at a launch ceremony in New Delhi on Friday, according to a company press release. “We’ll keep looking for opportunities to increase our presence here.”

We have seen significant acceptance of our smartphones in India over the last few years
Peter Zhai, Huawei

Huawei has become the latest Chinese smartphone brand to set up overseas production in the country to support the government’s “Make in India” campaign.

Other Chinese brands that have made the same commitment include Lenovo Group, TCL Communication Technology, Gionee, Xiaomi and Leshi Internet Information and Technology, more popularly known as LeEco.

According to research firm Strategy Analytics, there are about 800 different smartphone models from various domestic and foreign brands that now compete in India’s US$16 billion-a-year smartphone market.

Huawei did not provide a figure for its smartphone manufacturing investment in India, but said the production capacity of partner Flex’s plant will reach three million units by the end of 2017.

Flex currently makes Lenovo and Motorola-brand smartphones at its Chennai production facility, which has an overall manufacturing capacity of 10 million units.

Jeff Reece, head of the telecommunications business segment at Flex, said at the same ceremony that the alliance with Huawei “demonstrates our commitment to bring innovative supply chain solutions, high-quality advanced manufacturing and after-market services” to its partner’s operations in India.

A Flex spokesman told the South China Morning Post that the company has an initial 1,500 staff in India dedicated to Huawei smartphone assembly.

“We purchase smartphone components globally from our own suppliers, as well as Huawei’s suppliers, and consolidate these in a hub,” the spokesman said. “Flex then transports these components to our Chennai facility. Our efficient logistics methodology helps Huawei save on lead time and cost.”

Privately held Huawei said it expected to partner with more than 50,000 independent retail outlets across India by the end of this year to support its domestic smartphone sales. Those would be in addition to the company’s existing 350 distributors and more than 200 service centres in the country.

“We have seen significant acceptance of our smartphones in India over the last few years,” said Peter Zhai, the president of Huawei’s consumer business in India.

Data from research firm IDC, however, showed that Huawei has not cracked the upper echelon of smartphone brands in India. Samsung Electronics, Micromax, Lenovo, Intex and Reliance Jio led the market in the second quarter.

Huawei’s latest overseas manufacturing initiative comes a month after the company launched its largest global service centre in Bangalore, the capital of the southwestern Indian state of Karnataka.

That centre, the first such facility established by Huawei outside of China, is now supporting more than 50 network projects in about 30 countries across Asia, the Middle East and Africa.