Chennai: Dell Inc., the world’s second largest maker of personal computers behind Hewlett-Packard Co., has opened its first factory in India at Sriperambudur, on the outskirts of Chennai.
It comes a week after rival Lenovo Group Ltd’s local unit said it would set up a second Indian manufacturing facility at Baddi, an upcoming industrial town in Himachal Pradesh.
Local production will reduce delivery time and cut costs, which will be passed on to the customer, Dell said, declining details on cost savings. The facility, with a capacity to produce 400,000 desktop PCs, will cater to the fast-growing Indian market, said Rajan Anandan, vice-president and general manager of Dell India Ltd.
About 5.4 million PCs were sold in India in 2006, a growth of 25% over the previous year (4.3 million), according to IDC, a firm that tracks the information technology industry. In this period, Dell grew 76% in volume sales to 300,000, said Anandan, equivalent to a 6% market share.
Dell’s factory stands on a 50-acre plot of land, giving the company the flexibility to increase capacity several-fold.
In addition, it has been allotted 100 acres which would cater to its suppliers who want to set up factories in India; already, two have started building local units.
“Earlier, (Dell) was importing from Penang (China), and with PC sales in India going into hinterland, that didn’t make sense anymore,” said Gartner Inc.’s principal analyst Diptarup Chakraborti.