Dixon, Vivo to form joint venture to manufacture smartphones in India

Dixon Technologies and Vivo India are joining forces to create a joint venture for smartphone manufacturing, with Dixon holding a 51% stake and Vivo owning 49%. This collaboration supports the Indian government’s initiative encouraging Chinese companies to partner with Indian firms for local production.

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On December 15, Dixon Technologies, a leading Indian electronics manufacturer, and Vivo India, a subsidiary of the global smartphone giant Vivo, announced the execution of a binding term sheet to form a joint venture. Dixon will hold a majority 51% stake in the venture, while Vivo India will own the remaining 49%. This partnership is poised to enhance the manufacturing capabilities of both companies, with a strong focus on the Indian smartphone market.

The deal marks a significant step for Vivo India, as it aligns with the company’s strategy to deepen its presence in the Indian market, leveraging Dixon’s well-established manufacturing infrastructure. As per reports, Vivo was in discussions with several Indian contract manufacturers, including Dixon, as part of a broader plan to localize production further in India. This move is part of a larger trend, with other Chinese smartphone makers like Oppo also in talks with Indian manufacturers to expand their local operations.

Despite the collaboration, neither Dixon nor Vivo India will acquire stakes in each other outside of the joint venture, ensuring that both companies maintain their independence. This structure is designed to keep a clear focus on the objectives of the joint venture while safeguarding the strategic interests of both parties. The partnership is still subject to the execution of definitive agreements, the completion of customary conditions, and the approval of regulatory bodies, including adherence to India’s foreign exchange control laws.

Atul B. Lall, Vice Chairman and Managing Director of Dixon Technologies, expressed his enthusiasm about the partnership, stating, “It gives us immense pleasure to partner with Vivo India, which is an iconic global brand. We see Vivo as an ideal strategic partner that shares our core values of quality, engineering prowess, and customer satisfaction. This association will strengthen our manufacturing capabilities and Vivo’s leadership in the Indian business ecosystem, enabling us to build a more diversified, future-proof organization.”

The joint venture is expected to play a key role in bolstering Dixon’s foothold in the Android smartphone sector in India. Lall emphasized the potential for growth, noting that the partnership could deliver sustainable growth through the shared capabilities of both companies. The collaboration will not only focus on Vivo’s smartphone production in India but may also extend to other OEM (Original Equipment Manufacturer) orders for electronic products from various brands, broadening its scope beyond smartphones.

Jerome Chen, CEO of Vivo India, highlighted the synergy between the two companies, noting that Dixon’s strong localized management experience and manufacturing expertise would complement Vivo India’s current operations. “The proposed joint venture will undertake part of Vivo’s OEM orders in India, further enhancing our manufacturing footprint in the country,” Chen said.

This partnership signals a promising future for both companies as they aim to strengthen their positions in the highly competitive Indian smartphone market and contribute to the growing “Make in India” initiative.