China's BBK Group Partners with Indian Firms For Phone Production

BBK Group, China's largest mobile phone manufacturer, is beginning production of its Oppo, Vivo, and Realme smartphones in collaboration with Indian manufacturers Dixon Technologies and Karbonn Group, according to sources familiar with the situation. This is due in part to government pressure to find local partners and take advantage of the production-linked incentive (PLI) plan for phone manufacturing, they claimed.

The move comes despite Oppo and Vivo having a large smartphone plant each in India. These make the entire range of BBK Group brands, such as Oppo, Vivo, Realme, OnePlus and iQoo. Industry executives said Chinese smartphone companies are cautious about directly investing in their own plants for capacity expansion after increased scrutiny in the last few years, ranging from alleged customs duty and income tax evasion to money laundering. The ir bank accounts had also been frozen, forcing them to take legal recourse to ensure business continuity. Investigations are ongoing. Chinese companies came under pressure in India following the escalation in border tensions a few years ago, as per ET.

According to two industry officials, Vivo and Realme recently started producing a few devices at a Karbonn-owned plant. Dixon is reportedly in the final stages of signing contract manufacturing agreements with Oppo and Vivo. The monthly production capacity for Vivo and Realme in the Karbonn factory is now around one million units, but Dixon production will begin at a lower level, they claimed.

Oppo and Vivo did not apply for PLI advantages, therefore collaborating with contract manufacturers who have will help them become competitive, especially because competition Samsung is a PLI recipient, according to an executive.