The Tata Group is currently negotiating with Taipei’s Wistron Corp – one of Apple’s top three vendors in India – to buy its only manufacturing facility located in Karnataka for Rs 4,000-5,000 crore, as stated by the Economic Times on November 30.
The transaction will give Tata the ability to increase the manufacturing capabilities of another one of its companies, Tata Electronics Pvt Ltd (TEPL), in precision engineering.
TEPL plans to not only provide components for Apple’s iPhones but also for other large manufacturers in Korea and Japan as part of a ‘larger electronics ecosystem’.
The Tata Group refused to give a statement in response to the questions sent by ET. Furthermore, Wistron also did not reply to any email inquiries.
The Tata group has also been planning of establishing an electronics manufacturing joint venture with Wistron, Bloomberg reported in early September, as stated in the report.
“Tatas will be in charge, but Wistron may maintain a small percentage to take advantage of the global vendor network associated with Apple,” sources said according to the Economic Times.
Tata Sons’ wholly-owned subsidiary, TEPL, was established to head the group’s goal of becoming a leading mobile phone and component contract manufacturer. After group chairman N Chandrasekaran observed an opportunity in the geopolitical backlash against China, he decided to pursue wooing smartphone companies like Apple to production sites outside of China.
Apple’s three main vendors in India are Foxconn, Pegatron, and Wistron. Presently, the company produces the iPhone SE, iPhone 12 series, and iPhone 14 (basic) models in the country. All Pro models sold here are imported from overseas.
The purchase of Wistron’s facility could help the group make a significant move into contract manufacturing, especially as Apple looks to make India an export hub for iPhones. This move would also be beneficial for TEPL.
The negotiations, however, are still in their initial stages and the deal is yet to be finalized. We will have to wait for more news from either side in the coming days.
Shivendra Tiwari is an Engineer and an MBA in Marketing. He is the Content head at Marketing91 and a thorough Online Marketing enthusiast. Shivendra loves to follow different brands and study their Business and Marketing tactics.