Chinese smartphone giant Vivo in talks to sell stake in Indian factory to Tata Group: report

Chinese smartphone giant Vivo is said to be in talks to sell its stake in a factory in India to domestic conglomerate Tata Group, according to a report by local media Moneycontrol, as the South Asian nation tightens its scrutiny of foreign businesses operating in the country.

Tata is considering the acquisition of a majority stake in Vivo's Indian unit, and the talks are in "an advanced stage", Moneycontrol reported on Friday, citing an anonymous source. Vivo, according to the source, is seeking a high valuation for its asset.

Vivo - China's fifth-largest smartphone vendor in the first quarter, according to research firm IDC - declined to comment on the reported negotiations. Tata did not immediately respond to a request for comment on Monday.

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The report also cited other sources who said that Vivo's factory in Greater Noida, a city in the northern state of Uttar Pradesh, has been sold to Indian company Bhagwati Products. The factory is expected to start production for Vivo under a joint venture with Chinese electronics contract manufacturer Huaqin Technology, while government approval remains pending, according to the report.

Indian multinational conglomerate Tata Group, which manufactures various smartphone components for Apple, is expanding its domestic iPhone assembly operations. Photo: Shutterstock alt=Indian multinational conglomerate Tata Group, which manufactures various smartphone components for Apple, is expanding its domestic iPhone assembly operations. Photo: Shutterstock>

Vivo's potential deal with Tata reflects the growing ambitions of the Mumbai-based cars-to-software conglomerate, which last year took over the iPhone factory of Taiwanese electronics contract manufacturer Wistron in the southwestern state of Karnataka.

Tata last year received orders for Apple's iPhone 15 and iPhone 15 Plus models to be made in India, according to research firm TrendForce.

After its Wistron deal, Tata is now expanding its iPhone manufacturing operations at Hosur, a city in the southern state of Tamil Nadu, which will feature about 20 assembly lines, according to an India Briefing post published in April by professional services firm Dezan Shira & Associates.

For Vivo, the potential transaction with Tata comes amid India's growing scrutiny of Chinese businesses and New Delhi's efforts to involve local manufacturers in the operations of foreign smartphone brands in the country.

In June last year, Indian news outlet The Economic Times cited sources who said the government has asked Chinese smartphone makers to appoint Indian executives to key roles in their local operations.

A man cleans the logo of Chinese smartphone brand Vivo outside a store in Ahmedabad, a city in the western coastal state of Gujarat, on October 10, 2023. Photo: Reuters alt=A man cleans the logo of Chinese smartphone brand Vivo outside a store in Ahmedabad, a city in the western coastal state of Gujarat, on October 10, 2023. Photo: Reuters>

India, the world's second-largest smartphone market, is dominated by foreign brands, including a handful of major Chinese players. In the first quarter, the five top smartphone vendors by value were Samsung Electronics, Apple, Vivo, Xiaomi and Oppo, according to data from Counterpoint Research.

Vivo, headquartered in southern China's Dongguan city, has already become a target of the Indian government's scrutiny. Last October, India's Enforcement Directorate, the agency responsible for fighting financial crimes, arrested four Vivo executives even as the Chinese firm vowed to "exercise all available legal options".

The arrests came after Indian authorities raided dozens of Vivo's offices in July last year on suspicion of money laundering, following similar actions against Xiaomi and Huawei Technologies.

India's revenue intelligence unit, a branch of the Finance Ministry, previously held up some 27,000 Vivo smartphones worth nearly US$15 million at a New Delhi airport, preventing the company's Indian unit from exporting the devices to neighbouring markets, according to a December 2022 report by Bloomberg.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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