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The consumer electronics giant is betting big on
Asia's third-largest economy, at a time when overall sales have
struggled against rivals like Apple. In January, Samsung
reported its first annual group profit drop since 2011, and in
February its first wage freeze for employees in Korea in six
years.
One source familiar with Samsung said the group, one of the
biggest players in the Indian consumer electronics market, would
invest up to $1 billion in manufacturing units and in research
and development, adapting products to local taste and needs.
While Samsung does not give a figure for its investments or
revenue targets from India, senior officials say it plans to
invest heavily in manufacturing and research. It already uses a
10,000-strong development team to tailor everything from fridges
to air conditioning units for Indian consumers.
"While Prime Minister Narendra Modi is talking about 'Make in
India', we are saying 'Make for India'," said Ranjivjit Singh,
chief marketing officer for Samsung in India.
"It’s not just about manufacturing, that we’ve been doing
anyway. But we are making products designed for India, and this
doesn’t happen by luck."
Singh said Samsung was also considering adding a new
manufacturing unit. It already has three research centers and
two factories.
"A lot of states have been approaching us for a new factory, but
it is premature to talk about investments," he told Reuters.
Samsung is under intense pressure as rivals Apple and China's
Xiaomi threaten its position as global leader in smartphones,
key to its bottom line.
In India, Samsung is seeing strong competition from local
company Micromax, which has moved beyond phones into categories
like affordable televisions and tablets.
Xiaomi, which launched in the Indian market in July last year
has also said it would invest and begin local production in
India soon.
Samsung has been in India for two decades and of the handsets it
sells locally, 90 percent are made at two manufacturing units in
the country. They could also manufacture high end Galaxy S6
phones locally for export, officials said.
(Editing by Clara Ferreira Marques and Susan Thomas)
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