- China continued to be the world’s manufacturing hub until the COVID-19 pandemic.
- After Apple decided to manufacture iPhone 14 in Chennai, Google joined the league of companies choosing to manufacture in India.
- Google has asked for bids for the assembly of around 500,000 to 1 million units of Pixel smartphones accounting for 15-20 percent of its estimated annual production.
In 2010, the United States remained at the helm of the world’s largest manufacturing sector until it was taken over by China.
According to data published by the United Nations Statistics Division, China accounted for 28.7 percent of global manufacturing output in 2019.
That being said, the COVID-19 pandemic hit the global manufacturing circuit very hard. From the semiconductor chip shortage to an overall rise in labor costs around the world, such antics have proven enough to make China suffer as well.
China, which was previously a ground for the cheapest processing costs, has been forced to raise prices, making many billion-dollar companies and their bosses quite angry.
The net result is these companies are pulling the plug on their manufacturing units based out of the country and investing in building plants in other countries in the subcontinent.
Google to set up manufacturing in India
India gained at the expense of China due to the pandemic in terms of business at least with many firms choosing the country as a manufacturing alternative.
Tech giant Google is planning to shift the assembly of its flagship phone brand to India from China. The sole reason behind doing this is the pace of manufacturing has been slowed down immensely owing to the pandemic-fuelled lockdowns which have been hitting China non-stop even now that COVID cases have supposedly weaned across the globe.
Google has asked manufacturers in our country to submit bids for the assembly of around 500,000 to 1 million units of its Pixel smartphones. This particular smartphone of Google was almost entirely produced in China till the decision of shifting bases took place. Now India will account for 15-20 percent of Pixel’s estimated annual production.
Following in the footsteps of Apple
Google’s plan to shift bases comes three weeks after their biggest rival’s decision to manufacture their units in India as well. Before Apple’s annual September event where they unveil new products, the firm announced its decision to set up manufacturing units in Chennai.
Apple is also planning to begin manufacturing iPhone 14 and its entire range in India and has also started working with suppliers to ramp up manufacturing. It is estimated that the first iPhone 14 will be finished in late October or November after its initial release this month.
Apple’s decision to move bases is due to two major reasons – the obvious being the slow pace of manufacturing in China due to the new lockdown imposed by the government and the second one is the ongoing clash between Beijing and Washington.
Foxconn is Apple’s supplier based out of Taiwan. They have even started studying the process of shipping items outside China and assembling the iPhone 14.
Impact on American brands
China is facing a major crisis due to its slower manufacturing. Following in the footsteps of Apple and Google, more American brands are thinking of shifting bases as well such as Amazon and Ford.
The pace of manufacturing is a very important factor in any business. The slowing down of said pace will hamper the growth of a company. As a result of this India and even other countries like Mexico and Vietnam are being targeted to set up manufacturing units as different American brands are trying to diversify their production away from China.