Vivo plans to invest Rs 500 crore over 3 years on manufacturing plant, R&D unit in India

NEW DELHI: Chinese handset maker Vivo will invest Rs 500 crore in India over the next three years to set up a smartphone manufacturing unit and a R&D centre, a top executive said.

The first tranche of Rs 125 crore will come when the company starts assembly of some of its models at a brownfield unit in Noida, Uttar Pradesh, said Alex Feng, CEO of Vivo Mobile India. Vivo had 9% market share in the country as of March end, as per IHS Technology. “The assembly plant should begin production by October or November, after the final approval from the government comes in, likely by next month,” Feng said. “We’re negotiating with the UP government; we’ve applied for licences and clearances.”

Vivo, the No. 5 smartphone player in China, is the latest in a slew of Asian smartphone makers, including HTC, Xiaomi, Phi-Comm, Gionee and Asus, that have queued up to align with the government’s ‘ Make in India’ plan. The government recently changed duty structures making domestic production cheaper than imports.

Feng said India will be Vivo’s second most strategically important production base after its home market in terms of investments, scale and importance, given the potential for growth in smartphone penetration in the country from about 30% now. According to Feng, the next step will be designing in India. “The duty structures make things go faster to set up the plants, but finally the designing stage will come, which happened in China 10 years ago. We see the same opportunity here,” he said.