In Short:
Bharat FIH, a Foxconn company in Chennai, is looking to diversify into segments like telecom equipment and electric vehicles due to a drop in orders from Xiaomi and government crackdown on Chinese businesses in India. The company aims to leverage its success in smartphones for growth. However, experts warn that diversification may take time to show results as competition is stiff in these segments. Bharat FIH has also failed to meet production targets under Indian government schemes, costing them incentives.
In a bid to diversify and offset a slump in orders from key client Xiaomi, Foxconn group company Bharat FIH is looking to expand into newer segments at its sprawling campus near Chennai.
Exploring New Segments
Bharat FIH is now focusing on telecom equipment, electric vehicles, televisions, and displays besides its current focus on manufacturing Android phones.
Confirming this shift in strategy, Bharat FIH mentioned that its facility in Sriperumbudur is now primarily being used for SMT operations with some ATMP operations for specific segments.
Diversification Strategy
The company stated that it is leveraging its success in smartphones to make advancements in newer segments like EVs, without disclosing the plant’s current operating capacity.
Bharat FIH expressed its commitment to support the Government of India’s localization plans for each product category, aligning with initiatives like Make in India and PLI schemes in various segments.
Challenges and Diversification
Experts noted that Bharat FIH heavily relied on Xiaomi for business, and the recent decline in orders necessitated a move towards diversification beyond smartphones and a single client.
Xiaomi‘s declining handset production in India has had a significant impact on Bharat FIH, prompting the company to explore new avenues for growth.
Bharat FIH faces tough competition from established players in segments like mobile phone contract manufacturing, which may pose challenges in the diversification process.
Outlook and Challenges Ahead
While industry experts foresee challenges in the diversification journey, Bharat FIH remains committed to expanding its presence in telecom, EVs, and other segments to drive growth in the coming years.
Despite facing hurdles in meeting production targets and availing PLI benefits, the company aims to navigate through the competitive landscape and establish its foothold in the evolving Indian electronics manufacturing sector.
The outlook for India’s smartphone market remains steady, with modest growth forecasts in the coming years, presenting both opportunities and challenges for players like Bharat FIH to carve a niche in this competitive industry.
