Tata and Vedanta offer India lessons in industrial policy
Tata Group will one day become a case study for Indian industrial policy. The conglomerate has a high chance of success through buying its way into iPhone manufacturing, offering rival empires like mining group Vedanta Ltd. a lesson on the better path toward industrial expansion.
Wistron Corp., a Taipei-based maker of computers, servers and smartphones, is slowly exiting its business of assembling Apple Inc.’s marquee product. Two years ago, it sold a Chinese unit that makes iPhones to Luxshare Precision Industry Co. for 3.35 billion yuan ($457 million). On Oct. 27, it announced the sale of Wistron InfoComm Manufacturing (India) Private Ltd., known as WMMI, to Tata Electronics Private Ltd.
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Offering CollegeCourseWebsiteIIM LucknowIIML Chief Marketing Officer ProgrammeVisitIIM LucknowIIML Chief Executive Officer ProgrammeVisitIndian School of BusinessISB Venture Capital and Private Equity ProgramVisitBoth sides had been in discussion for over a year, so this transaction was widely expected. Wistron’s annual report shows improving revenue and operating income at WMMI, yet a post-tax loss for the division. Although the global smartphone market is currently in a slump, Tata ought to be able to drag the business to break even within a few years. That’s the easy part.
Tata faces stiff competition from Taiwan’s Foxconn Technology Group and Pegatron Corp., both of which are expanding in India. There’s a reason Wistron struggled to make much headway into Apple’s supply chain. Both larger rivals are more adept at a broader array of steps involved in manufacturing, including the parts that go inside as well as assembly of partially completed electronics subsystems.
Tata
