HMD Global's Strategic Move to Make India Its Manufacturing Hub and Expand Exports
Handset maker "HMD Global" is intensifying its strategy to establish India as its primary manufacturing hub. With plans to start exporting smartphones and feature phones to Europe and the US, the company has already begun shipments to markets in the Middle East and Africa.
Two years ago, "HMD Global" initiated the export of feature phones from Indian contract manufacturing partners approved under the production-linked incentive (PLI) scheme. This initiative has since expanded to include the Nokia-branded G42 smartphone.
Expansion and Export Goals:
So far, "HMD Global" has exported 2 million units from India and aims to double this number to 4 million by the end of 2025. Initially targeting the Middle East and Africa for its HMD-branded smartphones, the company now plans to expand its export reach to Europe and is considering the US.
“It will naturally go to Europe, and we are considering the US. This will happen step by step. One major sector we are concentrating is manufacturing. We are very optimistic about this. Manufacturing is my own background, and I am recognized for that in the industry.The first "HMD Global" founder, Jean-Francois Baril, stated, "We began exporting G42 smartphones, and today, India serves as the manufacturing center for our own branded HMD Crest smartphones."
Encouraging Government Policies:
Baril highlighted that the Indian government's policy-related steps are highly encouraging, significantly aiding the company's efforts to increase exports. “India is becoming very competitive for handset manufacturing,” he noted.
Production Breakdown and Partnerships:
"HMD Global" production in India comprises 70 percent feature phones and 30 percent smartphones. This manufacturing is conducted in partnership with electronics manufacturing services provider Dixon Technologies. To further expand its capacity, HMD has partnered with Zet Town India, a subsidiary of Zetwerk.
Strategic Shift and Brand Promotion:
The Finnish company is now focusing on promoting its own brand, HMD, for smartphones in a strategic effort to strengthen its market presence, which has been challenging since its 2016 entry. The Nokia name was reduced for smartphones and was only used for feature phones when HMD and Nokia reorganized their partnership in August of last year.
This strategic move is aimed at better competing with Chinese brands in both Indian and global markets. Despite the shift, "HMD Global" will continue to use the Nokia brand for feature phones due to its strong brand recall in the lower end of the market.
Conclusion:
"HMD Global" move to use India as its manufacturing hub and expand exports to Europe and the US is a significant step in its global strategy. With supportive government policies and strategic partnerships, the company is well-positioned to increase its market presence and compete more effectively on the global stage.
By focusing on quality manufacturing and strategic branding, "HMD Global" aims to rejuvenate its position in the competitive handset market, leveraging India’s growing capabilities as a manufacturing powerhouse.