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Lenovo may soon be 'Made in India'

October 3, 2006
Lenovo may soon be 'Made in India'. Check it out:
(The Economic Times (India) Via Thomson Dialog NewsEdge) : If personal computer major Lenovo's plans materialise, laptops will soon have a 'Made in India' tag. The Chinese major plans to start laptop manufacturing operations in India.

The manufacturing will begin soon from IBM's Pondicherry plant where the firm already makes desktops, said sources. The rationale behind starting laptop manufacturing here to is to ensure faster delivery to customers. Added to this is the fact that the cost of making laptops in India is much lower than in other Asian countries.



In this cut-throat competition market, where margins are wafer-thin and the slightest drop in sales can affect the business, Lenovo is making sure that it establishes itself well in the Indian market.

But it is unlikely there will be an impact on the prices. The company will manufacture the R-series of Thinkpad models, which are doing very well. Lenovo officials didn't respond to an email by ET.

After acquiring IBM's PC division last year, Lenovo wanted to tap markets outside China. The closest- and the fastest-growing market, India, is top priority for the computer major.

In February this year, under the chairman, a special advisory board was set to launch Lenovo's transaction business model outside China for the first time. The prime focus was to push for the Chinese computer giant's consumer range of products like personal computers and India emerged as an ideal test market.

The board comprises of senior management officials from across the world including China, India and the US like Ravi Marwaha, senior vice-president (Geography), Lenovo, added sources. The India transactional model deployment seems to have been successful and now the company plans to introduce the same in the Asean region as well.

For the same, Sanjeev Menon, GM (notebooks), Lenovo will also move to the Asean headquarters in Singapore. Post acquisition, Lenovo realised that they are addressing only 64% of the enterprise level market. To increase their reach and woo small customers, Lenovo has introduced entry level laptops and desktops.

The fact that the India market is growing at 23% as compared to A-PAC, which is growing at 10% annually, makes it a preferred destination to start manufacturing notebooks along with PCs. The company is stepping up its plans on the retail side as well.

There are plans to open more than a hundred exclusive showrooms displaying both desktops and laptops in B and C grade towns in the next one year. Currently, India contributes 7-8% of revenues to Lenovo's kitty but this will increase multi-fold as the business will start picking up from the next financial year, said sources.

Copyright 2006 The Economic Times of India, Coleman & Co Ltd. Source : Financial Times Information Limited


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