Lenovo, one of the world's largest electronics manufacturers and the proud owner of the Motorola brand, is expanding once again. The company announced that it would begin manufacturing both Lenovo and Motorola phones in a new factory in Chennai, India, starting with the low-price Moto E and Lenovo K3 Note models. According to the press release, 1500 employees have been hired across manufacturing, quality assurance, testing, and other departments.
The change is notable because in the last decade or so most smartphones have been manufactured almost exclusively in China, with a few exceptions for nearby regional companies (like Samsung in South Korea and Asus in Taiwan... though both only manufacture some models in their home countries). The vast majority of smartphones sold in India, even those made at the behest of Indian-owned companies, are manufactured in China by the company's own employees or intermediate manufacturers like Foxconn.
Lenovo isn't the first mobile manufacturer to open a factory specifically for India. Samsung has a manufacturing wing in the same Sriperambudur neighborhood as Lenovo, and it's already making mobile phones at another Indian plant. Chinese manufacturer Xiaomi began Indian production earlier this year. Some local phone manufacturers are also beginning to expand homeland production, such as Intex and Celkon. The presence of hundreds of millions of potential customers, cheaper distribution lines, and labor costs that are relatively competitive can do wonders for the bottom line. Google's own Android One line has focused on India as its first market. Expect to see other international phone makers expand into India soon.
It's worth mentioning that this Lenovo expansion comes just a week after the company announced it would be laying off 3,200 workers in various departments.
New Delhi, August 18, 2015: Lenovo today announced that it will start the local manufacturing of smartphones in Sriperambudur, Chennai. For the current financial year, Lenovo and Motorola will generate a capacity of six million units. The Moto E has already started rolling out from the plant and the K3 note will follow very soon.
“Lenovo is not new to manufacturing in India. We recognized the potential of India and we invested in PC manufacturing several years ago. Lenovo’s investment in the new manufacturing plant represents the potential we see in the Indian market and our long term commitment to our customers,” said Chen Xudong, president MBG Group, Lenovo and chairman Motorola Mobility Operating Board. “In the past ten years, our brand has grown manifold in India. We are excited to expand our presence and tap into India’s competent talent pool that will enable us to develop cutting-edge products for our customers across the world.”
The campus will house 1500 employees for manufacturing lines, quality assurance, product testing, etc. Both Lenovo and Motorola will have separate manufacturing lines at the same facility.
“The Indian Government’s thrust on ‘Make in India’ has opened up a plethora of opportunities for organizations looking to conduct business in India”, said Amar Babu, COO, Asia Pacific and chairman, Lenovo India. “Currently for smartphones, India is the third largest smartphone market in the world, according to IDC and we believe this an opportune time. Lenovo is transforming into a global consumer technology brand by differentiating itself on innovation and design. Today’s announcement reiterates India’s strategic importance in Lenovo’s global strategy and we are confident that this will propel Lenovo to its next phase of growth, diversifying beyond PCs into smart connected devices.”
The Lenovo and Motorola brands have seen huge success in India and have come back to manufacture in India in support of the ‘Make in India’ initiative. Both companies have started integrating the manufacturing and supply chain operations and are working towards to combining many back-end operations as well.