New Delhi: Dell Inc., the world’s second-largest computer maker, will start making desktops at a factory in Chennai by July and aims to double its annual sales within India to $1 billion (Rs4,400 crore) in the coming years, according to the company’s chief executive officer Michael Dell.
India is among the world’s fastest-growing markets for personal computers, driven by government buying and adoption of the Internet in businesses and homes. Sales of desktop and notebook models topped 5.4 million units in 2006 and is expected to grow to 9.8 million this year.
Dell, which ranks fourth behind Hewlett-Packard, HCL and Lenovo by the number of computers sold in India, will invest $60 million (Rs265 crore) in its Chennai factory, the company had said in September.
“Dell, in India, is a $500 million enterprise and is rapidly heading to $1 billion (in sales),” said the company’s founder.
Dell’s sales in India had grown 70% in units last year.
The India factory will initially manufacture up to 4,00,000 desktops a year, said Rajiv Ahuja, a Dell India spokesman.
Market leader H-P, which can make nearly a million personal computers a year at a facility near Bangalore, is setting up a new factory to make 3.6 million computers annually at Pantnagar in Uttarakhand.
Lenovo makes computers at Puducherry.
Industry experts said India could one day match China, which sold 25 million computers last year.
“There are two big growing markets in the world today: China and India,” said Vinnie Mehta, executive director of trade body Manufacturers’ Association of Information Technology. “PC makers like Dell realise that if they don’t come to India, they will lose because of the sheer size of the local market.”
Dell said India would benefit from reducing taxes and other tariffs on computers sold locally. Such levies make up between 20% and 25% of the cost of a computer sold in India, said Rajan Anandan, vice-president of sales at Dell India. Future expansion of the Chennai plant will depend on what happens to these tariffs, Dell said. “The tariff issue in India is the principle issue that needs to be addressed if India wants investments,” Dell said.
Pankaj Mishra in Bangalore contributed to this story.