China’s TCL, one of the world’s biggest television makers, has decided to make its upcoming Tirupati factory a global manufacturing hub as it plans to export the India-made TVs to the US.
The move comes amid trade tensions between the US and China, which has prompted many Chinese companies to develop fresh manufacturing locations outside their home turf to dodge US business sanctions and adverse duties.
Mike Chen, India country manager for TCL, said that the Chinese company – which is the top TV seller in the US and a strong player in markets such as France and Australia – has plans to increasingly use its India factory for meeting demand in global markets.
“The manufacturing costs in India are very attractive, and are even cheaper than what we incur in China. The cheaper labour cost here is one of the reasons behind the low costing,” Chen told TOI.
The company currently sources TVs in India from local contract manufacturers (the high-end ones are imported from China), but will gradually start making them at its own factory which will start production from the middle of this year. “We have invested around Rs 2,200 crore for the facility, and capacities here are higher considering that it will be used for meeting demand in other countries too.”
While the company sold around 1 million TVs in India last year, the installed capacity at the Tirupati plant is for 6 million panels annually and 3 million through assembly operations.
The government has been taking steps to encourage electronics manufacturing in India, and counts the recent cuts in corporate tax rates among the boosters. “We want India to be a strong manufacturing hub for electronics, and for telecom equipment,” electronics and IT minister Ravi Shankar Prasad had said recently.
TCL had re-entered India in 2016 after having quit the market over not-so-healthy operations. After launching TVs here, the company has now started sales of air-conditioners. Chen said that going forward, the company plans to become a full-product seller of consumer electronics by getting into categories such as washing machines, and refrigerators. He said that India is one of the critical markets for TCL, especially when it comes to the sales of TVs.―Times of India