LeEco to invest for local manufacturing

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LeEco, local manufacturing, smartphones

LeEco plans to make 400,000 smartphones a month in India by the fiscal end as it begins making phones locally in partnership with Taiwan’s Compal Electronics, yet another boost for the government’s Make in India program.

The Chinese internet ecosystem company will start with making 60,000 Le 2 smartphones on a monthly basis, from a 200,000 sq ft assembling facility in Greater Noida immediately.

For contract manufacturer Compal Electronics, the Greater Noida facility will be its first step in India, and fifth globally after Poland, Mexico, Brazil and China.

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Compal is one of LeEco’s global manufacturing partners and makes more than half the phones sold by the company. The erstwhile PC manufacturer also makes iPhones and iPads for Apple, since last year.

Last year about four million LeEco smartphones were made for China market, and this year the target is to nearly quadruple that number with sales targeted in India, China and possibly the US.

Atul Jain, chief operating officer of smartphone business at LeEco India expressed that the company expected manufacturing incentives by way of duty differential offered under the Make in India program to stay, despite worries from several quarters that benefits may vanish when goods and services tax (GST) comes into effect by next financial year.

About 200 people will be employed at the brownfield unit, which will be scaled up as the company ramps up production.

Local manufacturing will help the Beijing-headquartered reduce prices of new smartphone models, once assembly lines get expanded towards the end of the year. However, the locally made Le2 Superphone will be sold at the same price as the imported fully built unit – at Rs 11,999.

LeEco wants to make a bigger push in the India market, which is the fastest growing smartphone market in the world and also the most competitive. It has started selling phones in the offline market through select stores, with plans to reach 8,000 retail outlets by December. The company is awaiting grant of a single brand retail license, which will help it open up about 10 own branded stores.

The Taiwanese contact manufacturer may also make products like LeTV, which was recently launched in India, by next year. However, the road map of future products will be decided by LeEco’s management after a couple of quarters.

By Baishakhi Dutta

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