Korean major Samsung has taken a strategical detour regarding the Indian arm after it decided to supply Indian Manufactured Phones to Europe, Middle-East and Africa very soon. The move will occur in coherence with ambitious ‘Make in India’ programme.
The company pacing up its production capacity to 12 million (1.2 crore) montly against its present production of 5 million (50 lakh) Phones.
The move comes in the wake of Samsung declining market in India after a high-pitched competitive onslaught by Chinese brands, particularly Xiaomi, and global rival Apple in the premium-end.
Samsung is giving comfortable impression to the market, rather preparing for a fresh wave of growth in India, which has emerged as the second-biggest smartphone market in the world (behind China).
Sources close to the company said, “We are going to boost our engagement in India further, and are making fresh investments of around Rs 5,000 crore to double the installed capacity. This should be completed by the end of this year.”
It added, “Apart from displaying our seriousness when it comes to the Indian market, the move also highlights the capability of the factories here in producing high-quality products that meet global benchmarks. Higher production numbers will also help realise further economies of scale, and thus boost price competitiveness. Now we are preparing for the next onslaught — using India as one of the top global bases to service key markets in countries across Europe, Africa, and the Middle-East.”
The company is already producing the entire range of its devices locally (from factories in Noida), including entry-level feature phones and top-notch ones like Galaxy S9 devices.
However, the source said the company expects the government to provide incentives for exports to make manufacturing in India competitive when compared to global hubs in Vietnam, China, and Korea.
The company has launched its flagship S9 (at Rs 57,900) and S9+ (at Rs 64,900) smartphones, days after they were unveiled at the Mobile World Congress at Barcelona.
Asim Warsi, senior VP for Samsung India’s mobile business, said revenues are growing at a rapid pace, notwithstanding the tough competition. “Our revenues from the sale of mobile phones grew by 27% in 2016-17 to close the year at Rs 34,300 crore. We are maintaining a similar growth in 2017-18.