Honor plans India comeback with local manufacturing in 2024

The Chinese smartphone brand Honor is preparing to make a comeback in India through a licencing agreement with a local company.

The brand intends to resume domestic manufacturing by early 2024. Earlier, Honor had exited the Indian market due to challenges like a constrained marketing budget and portfolio management issues.

Revival plan 

The revival of Honor is facilitated by a licensing deal with a newly established Indian firm, Honor Tech, involving the transfer of technology and hardware for an undisclosed cost. Honor is planning to launch three phone models in India, with the mid-range Number series expected to debut around September.

"India was never a focus market for the Huawei Technologies-owned Honor until 2020, when it was forced to spin off the brand and reassess strategy," said Neil Shah, Vice President at Counterpoint Research.

Honor Tech, owned entirely by local stakeholders, will be responsible for producing, selling, and servicing Honor-branded smartphones in the Indian market. The company envisions achieving complete domestic manufacturing for all its phones over time.

Honor's past difficulties in India were connected to concerns about accountability within the country due to its Chinese ownership. This relaunch occurs against the backdrop of heightened scrutiny of Chinese enterprises in India, characterised by bans on certain apps and increased oversight of investment activities.

"All the phones will eventually be manufactured in India," CEO Madhav Sheth said, without disclosing further details.

"The biggest challenge with the Indian government in the past was how can a Chinese brand be accountable in India?" said Sheth, a former executive at rival Realme who was credited for its India expansion.

Upon re-entry, Honor will be rejoining a competitive landscape in India, competing with prominent players such as Samsung, Vivo, Xiaomi, and Realme. Honor Tech has set ambitious goals, aiming to secure a 5 per cent share of India's smartphone market based on sales volumes by 2024, with a target revenue of at least Rs 10,000 crore.

(With Reuters inputs)