DAIKIN

Domestic TV Makers Give A Fillip To Make In India

Amid a tug-of-war between the government and foreign multinationals, local television manufacturers are ramping up production capacity.

As major players such as Samsung and LG, among others, raise concerns over the ‘unfavourable’ manufacturing ecosystem in the country, Indian original equipment manufacturers (OEMs) like Super Plastronics (SPPL), Dixon Technologies and Mirc Electronics are pumping in money to expand capacity.

Noida-headquartered SPPL is investing Rs 150 crore to double production capacity to 720,000 units a year for LED TVs. The brand licensee for French TV brand Thomson and the US’ Kodak TVs has two more manufacturing units in Jammu and Himachal Pradesh.

“Given the rise in demand that we are observing, it is important that we increase our capacity now,” said Avneet Singh Marwah, chief executive officer, SPPL. According to Marwah, Thomson has already attained a double-digit market share in the e-commerce channel and he is now preparing to make Thomson TV available in offline stores through the multi-brand electronics retail outlets.

Dixon Technologies, also from Noida, is investing Rs 150 crore to set up a plant near Tirupati, Andhra Pradesh, for its key client Xiaomi. It would manufacture LED smart TVs and security cameras for Xiaomi, which ventured into the local TV market in early-2018 and has so far sold more than one million units.

After expansion, its installed capacity for flat-panel TVs would go up to 3.4 million from 2.4 million a year.

Mirc Electronics, the owner of Onida, re-vamped the durables brand recently and has started manufacturing TV panels at its plant in Maharashtra. The firm is now planning to expand capacity to sell panels to other TV manufacturers. More than 80 per cent of TV panels used locally continue to be imported. The Mumbai-headquartered firm expects a 10th of its revenue to come from sale of panels externally this year. In the December quarter, Mirc’s revenue rose 25 percent quarter-on-quarter to Rs 161 crore and its bottom line turned green from a net loss in September.

After the imposition of import duty on LCD/LED panels at 7.5 per cent and on open cells at 5 per cent in early 2018, Samsung, the largest player, shut down its TV plant in Chennai. It is now importing TV sets from Vietnam. LG Electronics continues to manufacture from here but said that the government needs to incentivise local manufacturing and bring down the tax rate on TV sets.

The issues of higher goods and services tax rate or GST on TV sets larger than 32-inch and lack of a manufacturing ecosystem in India have been raised by Indian OEMs as well.

According to Marwah, the GST rate of 28 percent on TVs larger than 32 inch is not a pragmatic decision by the government, since the share of 40-inch and 43-inch TVs is now over 40 per cent. Also, demand for TVs as large as 65-inch and 100-inch are growing fast.

SPPL will soon start manufacturing TVs of similar sizes.

“Before imposing import duties on parts like the flat panel and open cell, the authorities should have allowed us some time to build manufacturing capacity here. We have managed to check costs through cost-rationalisation,” he said.

However, further fluctuations in the rupee-dollar exchange rate and crude oil price may force TV makers to hike prices. Like Xiaomi and Onida, SPPL brands – Thomson and Kodak – operate on thin margins and offer highly price-competitive products. The range of these LED brands begin from Rs 9999 for 32-inch smart LEDs.―Business Standard

Share this:

Leave a Reply

Stay Updated on TV Veopar Journal.
Receive our Daily Newsletter.