Micromax is going global and local at the same time. While there are plans in place for the company to launch in Russia in the near future, company is also planning to start the assembling of the phones in India.
According to Micromax Co-founder Rahul Sharma, “We have a plant in Rudrapur and have already started assembling of phones on trial basis there. It will be commercially launched in the first quarter of next year.”
The keyword here is trial basis.
It can mean a lot of things and there can be many hindrances that might deter Micromax from finally taking the step.
He also mentioned that they want to take their turnover to INR 6000 crore by the end of the current financial year.
However, the two major hindrances that Micromax must be looking at:
1. The Cost of Assembling
The phones that are assembled outside and brought in India will have the cost of transport and duties added to them. If the assembling in India proves to be at least equivalent if not cheaper then it will be a practical decision to continue the assembling of phones.
2. The Hassles of Managing a Plant
Maintaining a supply chain is very different from handling a plant. The demand of workers, handling of machines, and other factors are something that Micromax would like to have a smooth functionality. If it turns out troublesome, Micromax might prefer to not do that.
Micromax has been expanding in the higher segment slowly and steadily. A few years back, no one would have thought a Micromax phone more than Rs. 5000 and now Micromax has phones over the price of Rs. 20000.
They have Hugh Jackman as their brand ambassador which is a clear indication of the lofty goals they have in mind. They want to reach many countries in the world and at the same time, strengthen their position in India. It was the number two company in India in Q2, as per IDC, with over 22% market share in smartphones.
With this expansion and reaching higher segment audience, it is a good time for Micromax to strengthen its assembly line. With a plant in India, it can protect itself to at least some extent from the international impacts by keeping the production going. Also, if they can manage to reduce the cost of assembling it would be even better for their profit margins.
Along with this, if Micromax can bring its services at par with the big companies, it might easily achieve its target of becoming a billion dollar company.
So, how many of you are looking forward to a Micromax phone saying- ‘Made in India’.
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Also saving on $ & saving trade deficit :). Ideally Govt should address this through electronics manufacturing policy,
That is yet to be seen if the money saved is more than that is spend on the manufacturing plant. :)