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TV makers may opt for license instead of local manufacture for premium models: Report

Date: 01-08-2020
Subject: TV makers may opt for license instead of local manufacture for premium models: Report
Television makers are reportedly more likely to acquire licenses to imports premium sets into the country, instead of setting up production facilities, as demand for these products may not warrant local manufacturing.

Xiaomi, TCL and Samsung have no immediate plans to set up manufacturing line for large-screen premium models in India, while Sony and LG are also considering the licence route for 75 inch size and bigger models, a source told The Economic Times.

Moneycontrol could not independently verify the report.

Mike Chen, general manager of TCL India confirmed to the paper the company has approached the Directorate General of Foreign Trade (DGFT) for the licences. Meanwhile, the other players – Xiaomi, LG, Sony and Samsung did not respond to queries, it said.

While the industry is aware that such licenses would be cumbersome to acquire, especially if the items are sourced from China, they fear that the ban will likely affect business during the crucial festive season, the report added.

Kamal Nandi, president, Consumer Electronics and Appliances Manufacturers Association (CEAMA) agreed that companies may seek licenses for premium models, where manufacturing investment would be “unviable.”

These considerations come as the Centre on July 30 imposed a ban on import of colour TVs into India – a move aimed at boosting local manufacturing of the item. The restrictions will be valid, except if companies have license to import the same.

Sony said it produces 99 percent of its TVs locally, while LG claims 96-97 percent units are India-made, Xiaomi makes 85 percent of their sets locally, followed by TCL (70 percent) and Samsung (65 percent).

Per industry estimates, as much as 35 percent of TV sets sold in India are imported. Among these 55-inch sets comprise 15-20 percent of the sales, for which companies import units.

Apart from the big-guns, the smaller players may have to completely re-think their strategy amid the import restrictions. A senior executive told the paper that the licensing issue “further complicates” a matter at a time when the COVID-19 pandemic has already battered businesses. "It is not possible to shift production overnight. The products imported are premium models and their sales will take a severe beating in the festive season if the consignments do not reach on time," he said.

Source:- moneycontrol.com

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