Lava pumps in Rs 2,600 Cr in manufacturing units, targets sub-Rs 12,000 segment

Amidst the time, when Chinese smartphone maker Xiaomi and Korean company Samsung have captured half of the Indian market, homegrown phone maker company Lava is targeting a new market -- under Rs 12,000 segment.

With an investment of Rs 2,600 crore, Lava International is planning to increase the production capacity of its manufacturing units to 21.6 crore units in the next five years. It aims to capture 40 per cent market share in India in the sub-Rs 12,000 segment, reports Economic Times via PTI.

The company currently holds around 8 per cent of market share in this price segment. 

Besides, the Noida-based company has also launched mobile devices design centre, which will be the first in India, and plans to pump in Rs 250 crore by 2021. It aims to produce advanced products at price point suited for its target market.

According to Lava International Chairman and Managing Director Hari Om Rai, the design centre will attract component players, which were so far missing from the Indian market. 

He estimates the size of Indian manufacturing ecosystem, including design and components, to be around $210 billion.

Rai believes that the segment he is targeting will increase to $180-200 billion in 10 years, globally. “This is a big opportunity for brands that will have control on the ecosystem. About USD 90 billion of business will come from Indian brands at that time."

Lava is present in 11 countries, including Nepal, Bangladesh, Sri Lanka, Pakistan, Indonesia, Mexico, the Middle East, Russia, Egypt, and Thailand. In the last fiscal, company reported a revenue of $1.2 billion.

Besides Lava, other domestic manufacturers such as Celkon Mobiles, Spice Mobility, and Karbonn are also planning new capacities in the country.

Chinese phone maker Gionee last year confirmed that it was planning to invest Rs 300 crore over the next three years.

According to data from the Indian Cellular Association, India has a capacity to assemble 270 million phones a year. Experts believe that with lower labour cost, continuing penchant for feature phones and the stagnant value chain make India a suitable ground for the new manufacturing hub.