In a latest development, the electronics contract manufacturer Dixon Technologies and Chinese smartphone maker Vivo are entering into a joint venture for manufacturing smartphones for the brand as well as others.
A Joint Venture
Under this deal, Dixon will have a majority stake,as per the company’s exchange filing on Sunday.
The company has signed a binding term sheet under which the electronics manufacturer will hold 51% of the share capital, while Vivo India will have 49% share, said Dixon.
Further, both the company, Dixon and Vivo India will not have any stake in each other under this arrangement.
So far, none of the companies disclose the financial details of the agreement.
Basically, this agreement is said to be subject to “an optimum structure and the relevant terms and conditions” to be set out in the definitive agreements, along with regulatory approval.
Creating A Strong Foothold
The development comes as the government has been pushing Chinese companies operating in India to form joint ventures with Indian entities.
Besides this, the center has also asked the Chinese smartphone brands to induct Indian equity partners in their local operations.
In addition to this, these companies also have to appoint Indian executives in key roles in their Indian operations.
Interestingly the timing of this development is followed by the Chinese mobile phone brands being charged with non-compliance of Indian laws, evading taxes, and foreign exchange violations.
The vice chairman, and managing director, Dixon, Atul B. Lall said, “We believe that this association will bolster our manufacturing excellence and superior execution abilities and vivo’s leadership in the Indian business ecosystem. We are excited to work together to create a stronger, more diversified, and future-proof organization,” in a statement.
Adding that this partnership further strengthens Dixon’s strong foothold in the Android smartphone ecosystem in India.
When it comes to Dixon, it makes smartphones for nearly every top smartphone brand including Samsung, Xiaomi, Motorola, Oppo, Transsion, Google, and Nothing.
Now, Dixon will now also make smartphones for Vivo as per this new joint venture.
In addition to this it will also undertake manufacturing for other brands, under this deal
The CEO of Vivo India, Jerome Chen noted, “The proposed joint venture will undertake part of vivo’s OEM orders of smartphones in India, and can also engage in OEM business of various electronic products of other brands. This partnership will effectively complement the current manufacturing operations of Vivo India.”
