Apple’s Indian manufacturing was hit hard again, and its suppliers’ factories in India suffered fire

It seems that Vladivostok Precision is just a fire accident of a company, but what it exposes is many problems made in India. Zhengwei Precision is one of the important suppliers of Apple, and it is also an important supplier to set up factories in India under the influence of Apple and Foxconn.
Another identity of Zhengwei Precision is that its boss and Foxconn’s boss, Gou Taiming, are two brothers. Both brothers are now deeply bound with Apple and rely on Apple’s orders to make money. This is also an important factor for Zhengwei Precision to quickly set up a factory in India. After all, they are brothers.
However, other suppliers who are not close to Foxconn are still reluctant to go to India to set up factories, because the Indian environment is too complex, the Indian people’s work enthusiasm is not high, and the cultural level is low, resulting in low work efficiency; The economic environment in India is not clear. From Nokia and Ericsson to today’s Chinese mobile phone brands have suffered huge taxes and fees in the Indian market, but it is difficult to transfer out of India after making money. Therefore, Nokia quickly closed its business in India.
All these factors have led to the doubts of enterprises in the industrial chain about setting up factories in India, while Zhengwei Precision went to India to set up factories because of its close relationship with Foxconn and Apple, but now it has encountered a fire accident and suffered a loss of 12 million dollars, which will have a new impact on other enterprises in the industrial chain and will certainly be a big blow to the Indian manufacturing promoted by Apple.
Apple’s Indian manufacturing was hit hard again, and its suppliers’ factories in India suffered fire
Apple has made great efforts to promote manufacturing in India. Under the temptation of Apple, Foxconn, Wistron and other factories have successively set up factories in India. However, after more than three years of development, the scale of Foxconn’s factories in India has always been difficult to expand. Foxconn set up a factory in Tamil Nadu, southern India, as early as 2019. It took three years to expand the number of employees to 17000, It is now planning to spend another three years to increase the number of employees to 70000.
In contrast, Foxconn’s factory in Chinese Mainland, Zhengzhou, completed its construction in just two years and increased the number of employees to more than 300000. Zhengzhou Foxconn also quickly became Apple’s largest OEM factory, producing half of its iPhones, which shows the efficiency of manufacturing in China.
Another problem faced by the Indian manufacturing promoted by Apple is the industrial chain. Weichuang has set up factories in India earlier than Foxconn for five years. However, there are few industrial chains in India so far. Most of the parts required by these factories are imported from China, and the cost of long-distance transportation is rising. The low labor cost of Indian manufacturing is rapidly filled by the transportation cost. Therefore, Apple began to push supply chain enterprises to set up factories in India.
Earlier, it was reported that Apple directly submitted applications to India on behalf of 17 Chinese supply chain enterprises. Finally, 14 enterprises’ applications were approved by India. At this time, it was reported that Zhengwei Precision, which had already set up factories in India, suffered a loss of nearly 100 million yuan due to fire. This will undoubtedly have a negative impact on Chinese supply chain enterprises. After all, few Chinese supply chains are as big as Zhengwei Precision.
Apple’s Indian manufacturing was hit hard again, and its suppliers’ factories in India suffered fire
Today’s Apple also has its own troubles. The iPhone 14 launched in 2022 was not recognized by the market, resulting in a decline in iPhone shipments in Q4 of 2022. In order to promote iPhone sales, Apple has recently reduced the price of the iPhone 14 Pro by 1000 yuan, setting a record of the shortest time to market and the highest price reduction for Apple’s new iPhone. For example, the Indian manufacturing that has been promoted has been hit again, which is even worse for Apple.