Departing from the crowded Indian capital city of New Delhi, it is an hour's drive to reach the new city of Noida in the southeastern suburbs of New Delhi. As a key point of India's “Mumbai Industrial Corridor Project in Delhiâ€, it is developing into the next mobile phone manufacturing cluster in India.
IBM, Samsung, China's mobile phone brand OPPO, vivo and local mobile phone brand LAVA and payment king PayTM all have Indian headquarters in the region. Samsung announced last year that it invested about 4.7 billion yuan in Noida to expand its largest mobile phone factory in the world; OPPO spent 2.2 billion yuan to build a new Indian headquarters in the Greater Noida area; vivo announced that it will invest more than 4 billion yuan to build a new factory in Greater Noida, making its Indian manufacturing base as large as the Chinese factory.
Noida also has OEM (OEM) factories that have gathered brands such as Xiaomi and Chuan, as well as upstream supply chains around these mobile phone manufacturers. Among them, there are many A-share listed companies, such as Aerospace Technology, Yitong Communication, Helitai, Changying Precision, Yutong Technology, Xinwangda and other companies. Outside the Noida area, TCL, BOE A and others are also building factories in India.
At present, China's mobile phone brands have already won more than 50% of the market in India, and look forward to gaining more market share. But if you want to achieve long-term development in India, you must satisfy the product production in India. After the Indian Prime Minister Modi proposed the “Made in India†plan in 2016, India gradually imposed tariffs on smart phone parts. Building factories in India is a necessary condition for the development of major mobile phone manufacturers.
Tariffs force supply chain into India
Haipai Technology, which makes OEMs for Xiaomi mobile phones and voice mobile phones, is a typical company developed by the Chinese mobile phone industry chain to India.
Haipai Technology is one of Xiaomei's important OEM cooperative enterprises. In August 2016, Haipai Technology registered and built a factory in India and currently produces about 1 million mobile phones per month. At present, Haipai Technology is already preparing for the construction of the second phase of the factory, renting the factory leaving the OPPO within 100 meters. After the completion of the new plant construction, it will be able to produce about 2.8 million smartphones per month.
In 2017, Shanghai Pai Technology was acquired by A-share listed company Aerospace Technology and became a member of the Aerospace Department. Zhang Qisheng, head of Haipai Technology India, said that Haipai Technology entered the Indian market on the one hand with strategic layout and on the other hand to meet customer requirements.
Beginning in 2016, Indian Prime Minister Modi launched a “phased manufacturing planâ€, hoping to use India's huge smartphone market to promote local production. The plan includes not only tariffs on mobile phones, but also tariffs on mobile phone chargers, batteries, headsets, and parts that have pre-installed printed circuit boards. The whole machine tax is 20%, and the SKD (semi-parts) tariff is between 5% and 15%.
For industries with high competition and low profit margins, bearing tariffs means that profits are eroded or lose their price competitiveness. “The mobile phone industry has low profit margins and fierce price competition. No company is willing to participate in competition with tariffs. The production of Apple iPhone is not in India, so the price is the highest in the world. Apple’s market share in India has fallen to only about 1% in 2018.†Introduction by people.
In order to avoid tariffs and other costs, Chinese smartphone manufacturers continue to expand their production capacity in India. Brands are also constantly urging their upstream suppliers in China to set up factories in India. "It is this year, Chuan, Xiaomi, OPPO will organize several waves of upstream suppliers to come to India to inspect the market. After the sounding, they have teamed up three times to come to India." Is preparing to establish the "Indian Chinese Mobile Phone Industry Association" in India. Yang Shucheng told the Securities Times reporter.
Shanghai Pai Technology is one of the early foundries to enter India. Zhang Qiusheng has been interviewed by a Chinese-invested delegation to India to inquire about the experience of setting up a factory in India.
In his view, more and more Chinese mobile phone brands are hoping that supply chain companies will build factories in India. On the one hand, the impact of tariff policies, on the other hand, the accelerated competition for products puts higher demands on the time of manufacturing. At present, India does not have a mobile phone manufacturing base, and bulk materials need to be airlifted from China to India. "The shipping time is too long, I can't wait." Zhang Qiusheng said.
Zhang Qiusheng said that the Noida area was the earliest OPPO and vivo to build a factory. Later, it brought suppliers such as data lines and chargers to build factories. Gradually, more foundries and supply chain companies gradually formed. The mobile phone industry base is a cluster formed spontaneously.
More supply chain companies have set up factories in the Noida cluster, and millet supplier Helitai has promised to invest about 200 million U.S. dollars in the Greater Noida area of ​​India in the next three years, and started production in early 2019. Xiaomi India’s chief operating officer said in an email that the company will produce components such as cameras, touch screen modules and fingerprint sensors in India.
Hand in hand to teach Indian workers
India's software industry is developed, but the industrial manufacturing base is weak, especially in the field of mobile phone manufacturing. Before that, India's local smart phone brands relied on the support of Chinese OEM companies. Chinese companies set up factories in India are also step by step to promote India's domestic industrial manufacturing.
At the Shanghai-based technology factory assembly line, it is equipped with the same SMT equipment production line as the Chinese mobile phone manufacturing line. The difference is that the Chinese factory has more automation equipment, while the Indian factory uses more labor.
The low labor cost is the advantage of India's manufacturing. The Indian workers in the Haipai assembly line include the pre-tax monthly salary of the CPF and social security of 11056 rupees (about 1,650 yuan). The per capita overtime pay is about 300 to 400 yuan per month, and the recruitment is easy. "Ten 100 people can come to apply for four or five hundred people." Zhang Qiusheng said.
In the workshop of Shanghai School, equipment with high technical level such as SMT is still a Chinese worker. “Technical work relies on Chinese workers to teach Indian local workers.†He said that Indians like freedom and are less productive than Chinese employees. When the Haipai factory was first put into production in 2016, the production efficiency of the Indian factory was only 60% of that in China, and it is now gradually rising to about 80% to 90%.
In addition to demographic factors, India has no advantage in manufacturing other means of production. For example, the monthly rent of the factory is about 30 yuan per square meter, the level is almost the same as that of the Shenzhen factory; the industrial electricity uses the ladder charge, and the price is not much different from that in the Guangdong area, but the power outage in India has occurred.
Qiu Bin, head of the India-based plant in the company, told the Securities Times that “the Indian power facilities are like the Shenzhen Guanlan in the 1990s. It is a common phenomenon to switch off electricity ten times a day during the summer peak season. The factory must be equipped with spare equipment. Generators, or they can't start work. Indian workers are very difficult to manage, often with absenteeism and low productivity."
The reporter was informed that because the Indian market is developing rapidly, the upstream business of Shanghai Pai Technology and Yitong Communication can maintain a stable profit margin, even slightly higher than the profit margin of Chinese factories. Now, new plants and equipment are still being invested. Trying to take more shares in India's fast-growing mobile phone market.
Zhang Zuosheng believes that the biggest problem in setting up factories in India is that India's tariff policy changes too fast, and customs declarations need to be constantly changing. India is known for its strict supervision and changes in industrial strategy. Zhang Qisheng said that to promote Indian manufacturing, India also needs a stable and more business-friendly policy system.
Made in China in India, it does not actually enjoy India's policy support, but more is the industrial agglomeration effect. There is no low-cost financing channel for investing in India. The commercial loan interest is about 10%, which is close to the domestic consumer loan interest rate.
Yang Shucheng said that Chinese-funded enterprises in India have also begun to form clusters. For example, OPPO, vivo, and TCL have begun to build industrial parks. More companies have formed industrial synergies, and they have negotiated with Indian government policies or have more chips in the future.
Flat Slings,Polyester Flat Webbing Sling,Flat Polyester Woven Webbing Sling,Flat Woven Webbing Sling
Guangdong Gongyou Lift Slings Machinery CO.,LTD , https://www.gongyouslings.com