In a significant development in the smartphone manufacturing sector, BBK Group, China's leading mobile phone manufacturer, has initiated plans to produce its renowned brands—Oppo, Vivo, and Realme—in collaboration with Indian companies Dixon Technologies and Karbonn Group. This move, as per sources familiar with the matter, is a response to government incentives under the production-linked incentive (PLI) plan for phone manufacturing, coupled with pressure to engage local partners.
Despite already operating substantial smartphone plants in India, Oppo and Vivo, under the BBK Group umbrella, have opted for collaboration with Indian manufacturers rather than expanding their existing facilities. This decision is influenced by a cautious approach towards direct investment in light of heightened scrutiny in recent years, including allegations ranging from customs duty evasion to money laundering. The companies have faced challenges such as frozen bank accounts, necessitating legal action to maintain business continuity.
The partnership between BBK Group and Indian manufacturers signifies a strategic maneuver amidst geopolitical tensions, particularly between India and China. As a result, BBK Group brands are now exploring collaboration opportunities with Indian partners to ensure seamless operations.
Recent reports suggest that Vivo and Realme have already commenced production of select devices at a Karbonn-owned plant, while Dixon Technologies is on the verge of finalizing contract manufacturing agreements with Oppo and Vivo. While the monthly production capacity for Vivo and Realme at the Karbonn facility stands at approximately one million units, Dixon's production is expected to commence at a lower level initially.
Notably, Oppo and Vivo have refrained from availing themselves of PLI benefits, opting instead to collaborate with contract manufacturers. This strategic move is aimed at enhancing competitiveness, particularly in light of rival Samsung's participation in the PLI scheme, according to industry executives.
The collaboration between BBK Group and Indian firms underscores a broader trend of international companies seeking to navigate India's manufacturing landscape, leveraging incentives and strategic partnerships amid evolving geopolitical dynamics.