Dixon Partners with Xiaomi for Smartphone Manufacturing in India
Dixon Technologies India Limited recently announced a development in the smartphone manufacturing industry on Wednesday, September 27, and the company revealed that its wholly owned subsidiary, Padget Electronics Private Limited, has entered into a partnership agreement with Xiaomi Technology India Private Limited, to manufacture smartphones and related products for Xiaomi and the manufacturing facility located in Noida, Uttar Pradesh. This collaboration is expected to have far-reaching implications in the Indian tech landscape.
India, as the world's second-largest smartphone market, remains a highly competitive region for global smartphone brands. Companies like Apple are actively working to increase their market share in the country. Xiaomi's decision to engage local partners for manufacturing reflects the growing importance of India in the global tech industry.
Previous Collaborations & Dixon's Perspective
This collaboration with Dixon Technologies is not the first time Xiaomi has engaged with local manufacturers in India, earlier, Xiaomi awarded a contract to India's Optiemus Electronics Ltd to manufacture Bluetooth neckband earphones, previously imported from China. These moves demonstrate Xiaomi's commitment to contributing to the Indian manufacturing ecosystem.
Atul B Lall, Vice Chairman & Managing Director of Dixon Technologies (India) Limited, expressed his pride in partnering with Xiaomi, an iconic brand in the tech industry. “He pointed out that the partnership can make the best use of Dixon's history of getting things done well, combined with Xiaomi's knowledge of how to operate in the Indian business environment. Lall also emphasized the partnership's significance in aligning with the Indian Government's ‘Make in India’ initiative, which promotes local manufacturing.”
Dixon Technologies India sees, Xiaomi as an ideal partner that shares its core values of quality, engineering expertise, and a commitment to customer satisfaction, this collaboration is expected to mark the beginning of a long and mutually beneficial relationship with immense potential for sustainable growth.
Government's Production-Linked Incentive (PLI) Scheme
Dixon's subsidiary, Padget Electronics, holds a special status as one of the approved companies under the Government of India's PLI scheme, this deal is expected to allow Xiaomi India to benefit from Dixon's eligibility for incentives under the PLI scheme for mobile manufacturing. For Dixon, it signifies another substantial contract that will contribute significantly to its mobile manufacturing business.
Also, the Indian government has been actively encouraging smartphone manufacturers to involve more local players in their manufacturing ecosystem. This initiative aligns with the government's broader efforts to promote local manufacturing and reduce dependency on imports.
Under the PLI scheme, Dixon has already received incentives of approximately ₹110 crore for meeting incremental production targets. Dixon is known for manufacturing phones for prominent brands like Reliance Jio, Motorola, and Nokia, out of these Motorola phones are exported from India.
During the company’s Q4 2023 earnings call, Atul B. Lall revealed that the company is close to finalizing two substantial agreements with one of the largest global brands operating in India, this hints at Dixon's ambition to expand its reach and presence in the mobile manufacturing sector.
Over the past month, the shares of Dixon Technologies increased by 5.88%, this recent performance reflects a positive trend in the stock's value. Looking at the past six months, investors in Dixon Technologies have seen an impressive return on their investments, of 85% indicating strong growth and profitability over this relatively short period.
In a one-year timeframe, the stock has shown steady progress, with an upward movement of 23% consistent upward trajectory over the year demonstrates the company's ability to generate value for its shareholders and maintain a positive outlook in the market.
In conclusion, the partnership between Dixon Technologies' subsidiary and Xiaomi marks a significant step in the Indian smartphone manufacturing landscape, It signifies the growing interest of global tech giants in local production and aligns with the Indian government's "Make in India" initiative. This collaboration is expected to have a positive impact on both companies, further enhancing their presence and capabilities in the Indian market.
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