BERLIN: Lenovo, the world’s largest personal computer maker, said India could become one of its global manufacturing hubs at a time when it is in the cross fire of tariff increases, direct fallout of the US-China trade fight.
Last month, US President Donald Trump announced a plan to impose a 10% import tariff on Chinese goods while new duty on certain consumer items from China, such as cellphones and laptops, will be decided by December. “For the time being, the picture is so unstable to decide what to do. But mobile (in India) is one possibility,” said Gianfranco Lanci, chief operating officer at Lenovo.
“We are considering India as a big hub to make mobiles that will serve other countries or nearby markets right from Middle East, Africa and parts of Europe.”
The company that makes one in every four PCs sold world over has about 37 manufacturing centres globally, including Mexico and India. However, it said higher import duty and lack of vendors and supporting infrastructure in India is still a big challenge to scale up PC manufacturing for its global requirement.
Despite being a price sensitive market, the company said it has seen an increasing consumer shift towards premium products such as ultrathin laptops and gaming PCs in India. At a time when the country is seeing people cutting down on discretionary spends especially on large ticket items, Lenovo still expects better growth due to upgrades to business computers and Reliance’s JioFiber launch, which offers low-priced and faster internet service.
“If you bring internet at 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,” said Lanci, adding that India is already among the top ten markets in terms of priority and investment.
In India, Lenovo controls nearly a third of personal computer market while it remains a fringe player in mobile phones segment dominated by Xiaomi and Samsung. Research firm IDC said Lenovo’s share rose to 46% compared to HP’s 22% in April-June quarter, largely due to a large order by the Tamil Nadu government for its plan to distribute 1.5 million laptops to students.