India could become Lenovo's mobile manufacturing hub

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Team Industry Outlook | Monday, 09 September 2019

Lenovo, the largest personal computer maker in the world, is likely to make India its global manufacturing hub. The statement came at a time when the company is in the crossfire of tariff hike, a direct consequence of the U.S.-China Trade war.

In August, U.S. President Donald Trump announced a new plan of imposing a 10 percent import tariff on Chinese goods and a new duty on some consumer items from China like cell phones and laptops which will be finalized in the month of December.

Gianfranco Lanci, the chief operating officer (COO) of Lenovo said, "For the time being, the picture is so unstable to decide what to do. But mobile in India is one possibility. We are considering India as a big hub to make mobiles that will serve other countries or nearby markets right from the Middle East, Africa and parts of Europe."

Lenovo currently controls a third of the personal computer market in India and has also raised its share to 46 percent in the April-June quarter.

Team Industry Outlook

Lenovo makes one in every four PCs that are sold worldwide and has over 37 manufacturing centers around the globe, including India and Mexico. However, the company addressed some issues of higher import duty, lack of vendors and supporting infrastructure prevailing in the Indian market that will make it difficult to scale up PC manufacturing as per its global requirement.

The company said that it has seen a major consumer shift towards premium products such as gaming PCs and ultrathin laptops in the Indian market but still expects growth in the country given the upgrades to business computers and the launch of Reliance's JioFiber launch.

"If you bring the internet at an affordable cost, it will change the dynamics of the number of devices you can sell and the entire industry will benefit. Our industry will become a little bit more competitive but it will also enlarge the market," added Lanci.

Lenovo currently controls a third of the personal computer market in India and has also raised its share to 46 percent in the April-June quarter. The rise in Lenovo’s share in the market can be attributed to the large order that it acquired from the Tamil Nadu government after its plan of distributing 1.5 million laptops to the students.