Huawei affirms commitment to India with new manufacturing plant

Chinese device maker and equipment vendor Huawei is set to commence the manufacture of its Honor smartphones in a Chennai-based plant next month.

Huawei is partnering with Flex India, owned by electronics maker Flextronics International, to set up a local production plant for its Honor devices. The Southern Indian facility will have a three million unit capacity by the end of next year.

The Shenzhen-based firm is among the increasingly number of manufacturers looking to establish domestic production facilities in India to fall in line with the government’s “Make in India” initiative. India is an appealing market for Chinese vendors looking for expansion opportunities as their home market approaches saturation.

Despite only one in four Indians currently owning a smartphone, the domestic market for smart devices is worth $16 billion, and is set to become the world’s second largest after China. The past year has seen investors establish 37 production plants for handsets in the country, directly creating 40,000 new jobs and doubling the annual output of devices to 110 million.

Investment has come from local firms such as Intex and Micromax, as well as Chinese companies such as LeEco and Foxconn. The latter firm is the world’s leading electronics contract manufacturer and is known for making Apple’s iPhone – a device which reportedly could be built in India in the next two to three years.

At the end of Q2, Huawei was the world’s number three smartphone manufacturer. It has had a presence in India for 16 years, recently opening a global service centre in Bengaluru. Huawei India CEO Jay Chen said: “The start of manufacturing in India is an affirmation of our commitment to India. We are convinced about the growth potential and future of India and we’ll keep looking for opportunities to increase our presence here.”

To this end, Huawei has stated that it will open 200 service centres in India to bolster its customer care services in India. It is also aiming to partner with around 50,000 retail centres by the end of 2016 in order to shore up its distribution network.

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