Wistron Transfers iPhone Assembly Plant In India To Tata And Exits Citing Low Margins And Growth

Wistron is exiting from India. The company is currently completing the formalities of selling its Apple iPhone assembly in the country to the Tata Group.

Tata Group successfully negotiated and accepted contracts to assemble Apple iPhones in India last year. It is rather strange to see Wistron exiting India even as Apple's other contract makers Foxconn and Pegatron are trying to boost their activities and production lines for the iPhone maker. Let's look at the reasons why Wistron couldn't "Make In India".

Wistron First Apple Contract Manufacturer To Enter And Leave India

Apple currently relies on three major contract manufacturers for its iPhone devices. They include Foxconn, Pegatron, and Wistron.

Wistron was the first of Apple's global contract manufacturers to start assembling iPhones in India in 2017. As it turns out, the Taiwanese company could soon be the first of Apple's manufacturers to leave the country.

Wistron had been reportedly contemplating an exit as it didn't see long-term profitability. This is primarily because the company had remained a mere assembler of the final product.

"Wistron has not been able to make any money from the Apple business in India. It has tried to negotiate with Apple for higher margins, but being a smaller player compared to Foxconn and Pegatron globally, it did not have the necessary leverage," an employee reportedly said.

According to some employees who are privy to the developments, the company would rather bet on its core IT manufacturing businesses in countries like Vietnam and Mexico. Simply put, Wistron is betting on being a big supplier to the IT industries in developing countries.

Tata Group Starts Taking Over Wistron Operations

Wistron was essentially unable to go deeper into Apple's supply chain system and scale its operations. Additionally, the company wasn't able to better integrate with the Indian work culture and workforce.

Altercations with the workforce in the early years had cost Wistron an estimated ₹430 crore in damages. Moreover, Apple put the company on probation. The iPhone maker halted production at the unit until corrective measures were implemented.

Wistron resumed work in February 2021. However, the company never really grew or scaled up after the episode. Last week, 400 senior production staff protested against the management.

The Tata Group has formally taken over the Wistron plant and has started iPhone production. If the past and current trends are any indicator, the prospects for the entire supply chain look good.