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Chinese Handset Maker to Set Up Manufacturing Facility in India, Others to Follow

| Apr 06, 2015 07:50 AM EDT

A worker tests mobile phones at a production line of Ningbo Bird Co. Ltd. in the eastern port city of Ningbo.

Gionee, a Chinese handset manufacturer, has expressed plans to invest some Rs 300 crore in the next three years in a manufacturing facility in India, a move which other Chinese handset firms like Karbonn and Xiaomi are set to follow.

The company made the announcement during the launching of its "ELife S7" priced at Rs 24,999.

The Economic Times of India reported that the company has taken the services of Ernst & Young, a consultancy firm, to advise the Chinese company regarding partnerships and choosing potential locations across the country.

"We have already seen two locations. Our head of manufacturing, who takes the final call, is visiting in three weeks. Post that, we will be in a better position to talk about the location," Gionee India Chief Executive Officer and Managing Director Arvind Vohra was quoted as saying.

According to the report, the company intends to invest Rs 300 crore in the next three years for the setting up of its manufacturing base in the country, as the company expects to cater to domestic consumers as well as those from South Asian Association for Regional Cooperation (SAARC) countries and Nigeria.

The company has also increased its allocation for marketing and advertising to Rs 225 crore, an increase from Rs 132 crore last year, as it announced that it will begin making entry-level devices this year.

The Chinese firm, which sold four million devices in India last year, has expressed confidence that it can double its sales this year.

India is already the second biggest market for Gionee, the report said.

"Last year, we sold four million devices in India and 28 million globally. That is one-seventh of the total sales. This year, we expect the sales to touch eight million," Vohra said.

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