The company plans to produce 6 million units in 2015-16, beginning with two 4G models
Chinese personal computer maker Lenovo Group Ltd on Tuesday said it has started assembling smartphones at the 40,000 sq. ft facility in Chennai run by Singapore-based contract manufacturer Flextronics International Ltd.
The factory will have two dedicated lines to manufacture Lenovo and Motorola smartphones.
The company plans to produce 6 million units in 2015-16 beginning with two 4G models, Moto E and Lenovo K3 Note, and raise it to 12-14 million units in the next financial year.
The move is significant for Lenovo globally, as the Chinese giant looks at an integrated model for both Lenovo and Motorola brands of phones.
The idea is to drive efficiency, said Amar Babu, who in July became chief operating officer for Asia Pacific and chairman, Lenovo India, from India managing director.
The firm plans to source 30% of the components locally for the Indian market, said Babu, but declined to give any time frame.
“We have seen several companies coming back for manufacturing smartphones. India has become the fastest growing smartphone manufacturing destination," said Ajay Kumar, joint secretary, department of electronics and information technology. “Smartphones, which is the central platform for Digital India, has become the fulcrum of make in India."
Lenovo’s announcement takes a cue from such plans by many others to assemble phones in India, giving a push to the Make in India initiative.
In the past couple of months, smartphone brands Xiaomi Corp., InFocus have partnered with Foxconn Technology Group to manufacture devices at the latter’s Andhra Pradesh facility. OnePlus said it is in talks with Foxconn to close a deal, but the location of the plant has not been finalized yet.
Earlier this month, Foxconn announced a $5 billion investment to set up manufacturing units in Maharashtra over the next five years. Lava International Ltd, which has an assembly unit in Noida, said it will invest ₹ 2,615 crore over the next seven years to set up one more factory in the country by 2017.
India has been the key market for Lenovo since the past 10 years after the company acquired the personal computer business of International Business Machines Corp. (IBM) in 2004. In 2014, it acquired IBM’s server unit. The same year it acquired Motorola Mobility from Google Inc. and became the third-largest smartphone manufacturer globally.
In India, Lenovo’s smartphone shipment market share increased from 0.6% in the March quarter of 2014 to 4.7% in the December quarter of the same year (primarily due to the acquisition of Motorola), according to data from Hong Kong-based Counterpoint Research.
It rose to 6% in the June quarter of 2015, becoming the fifth-largest smartphone maker in the country, according to data collated by researcher International Data Corp.