Local contract makers ready to be +1 to China at manufacturing gala
Dixon Technologies and Karbonn Group have been able to nearly equal the cost of manufacturing in India with that in China, executives said. They have been able to do so by learning from Chinese methods and will invest in automation to further pare expenses.
«The discussions that we have had with our global customers (laptop and tablet brands) is that we feel we have almost matched the China manufacturing cost,» Dixon Technologies managing director Atul Lall told analysts last week.
Karbonn chairman Pardeep Jain said the key to matching China's manufacturing cost has been the government's production-linked incentive (PLI) scheme.
Lall said Dixon is expanding its lighting exports to new customers in Germany and the UK. It will soon start shipping out mobile phones for anchor customers such as Motorola and Nokia, he said.
Domestic pioneers
It will also start exporting components like inverter controller boards for air-conditioners, which are sold locally to Daikin, Lall said.
Dixon expects export revenue of Rs 2,000-2,500 crore this fiscal year, compared with Rs 1,000 crore in FY23, and exponential growth thereafter.
Lall told ET Dixon has to match China manufacturing costs to be successful since there is no import duty on products such as laptops and tablets.
«We achieved this parity in manufacturing cost by sending our teams to large Chinese contract manufacturers to understand their operating procedures and cost management, against which we have benchmarked our operation,» he said. «We will also invest more in automation to achieve this parity across products.»
Brands like Apple have been exporting products such as mobile phones from India but that's from plants set up by its global manufacturing partners, such
