CHENNAI: Ahead of the manufacturing of personal computers and laptops under the Center’s production-linked incentive scheme (PLI), Lenovo India has introduced more localised desktops.
The company on Friday revealed its Class- 1 PMA complaint desktops are with 50% component localisation including domestically manufactured printed circuit boards (PCBs).
PMA complaint desktops allow the company to tap into the government segment and participate in procurements under the preferential market (PMA) access policy. This comes at a time when the country’s second largest PC vendor is facing a slowdown in demand. According to the IDC report, 2Q23, Lenovo’s shipments fell 30.2% compared to last year. It also lost market share from 19.6% to 16.2% on a yearly basis. The company shipped 5.12 lakh units.
Lenovo’s sole manufacturing facility for laptops, notebooks and PCs is in Puducherry, and has an installed capacity of 1.4 million units per annum. Its current capacity utilization is around 45%. The company has opened a third assembly line in 2021 based on the market demand.
Speaking to the media, Saurabh Agrawal, Chief Operating Officer of Lenovo India, agreed that the post pandemic demand has satiated. Despite the demand slowdown, the sale of the laptop and desktop will
continue to grow since the penetration is low in the country, he said.
Increased localisation would also help the company under the revised IT hardware PLI scheme, which provides additional incentives for localisation of components apart from assembly. It has been selected as one of 27 companies cohort for IT hardware PLI announced recently. The company is yet to commence manufacturing under the scheme. Its localisation is around 10% except for select variants launched on Friday.
Saurabh Agrawal said the company would not manufacture parts but the local supply chain ecosystem has to develop in the coming years as the government is pushing for domestic manufacturing. Lenovo calls itself a global sourcing company. Responding to queries, he said localisation has to make sense from a customer’s standpoint- quality, cost and everything is important.
“Supply chain costs are critical, initially investment costs are higher, there has to be an advantage on cost perspective. The government’s effort (PLI) gives some incentive in cost. The PCBA manufacturing has added value, he added.