Lenovo Plans Manufacturing Servers In India To Deepen Operations

Chinese technology major Lenovo, which makes laptops, tablets, servers and smartphones under the Motorola brand, is evaluating manufacturing of servers in India as it looks to take advantage of the production-linked incentive (PLI) scheme for IT hardware amid regulatory clampdown in the US.

Vlad Rozanovich, senior vice president, Infrastructure Solutions Group, Lenovo, told businessline that this is in tandem with the growth of its data centre solutions business, as the company expects its infrastructure solutions group (ISG) vertical to record double digit growth.

Rozanovich added that the company is exploring various options, including utilising existing facilities or forming new manufacturing partnerships.

Lenovo plans to ramp up local manufacturing in India, which it considers its top-priority market globally.

“India is top priority of our international markets for several reasons. The obvious growth enabled by connectivity and being able to further propagate our devices, but we also have an enormously talented workforce in India, and continue to be on a doubling trajectory of jobs here,” said Matthew Zielinski, president of international markets at Lenovo. 

It has 1,700 employees in India, and three manufacturing sites.

Lenovo acquired Motorola, an American consumer electronics manufacturer, in 2014.

The Chinese technology major makes desktops and personal computers locally, besides all Motorola smartphones sold in India. 

It is pertinent to note that Motorola was among the early beneficiaries of the Centre’s PLI for mobile phone manufacturing.

The PLI for large-scale electronics manufacturing was introduced in 2020. It provides manufacturers with incentives to encourage domestic production. 

Shailendra Katyal, Lenovo’s India Managing Director, highlighted that India’s contribution to the global PC market has increased in the last two years. 

India’s PC market hovers around 14-15 Mn units annually and is now bigger than Japan in terms of the total addressable market, Katyal said, adding that home penetration, which currently stands at 10-12%, will drive sales of PCs, going forward.

As per International Data Corporation, Lenovo was the second-largest PC maker in the July-September period of 2023, with a 17% market share. HP Inc. led the market with a share of 29.4%.

Lately, the push by the government and the ongoing tensions between Beijing and Washington have resulted in iPhone manufacturer Apple shifting some of its production to India. The company is now looking at producing iPhones worth INR 1 Lakh Cr in India by the end of March 2024.

Meanwhile, another Chinese manufacturer Xiaomi, which is currently manufacturing wireless audio products in India, is also said to be looking to start smartphone production in the country. Tech giant Google has also announced its plans to begin production of Pixel smartphones in India.