Tata Group's manufacturing strategy looks similar to China's Luxshare's, says Princeton researcher

According to the researcher, Tata Group's rapid expansion into iPhone production has been timed well.

Tata Group is likely to become a major contract manufacturer in India, with a strategy similar to that of Chinese company Luxshare, wrote a postdoctoral researcher at Princeton University.

Luxshare was founded by Grace Wang, a leading businesswoman and former "factory girl" from Shenzhen. Luxshare, the exclusive manufacturer of Apple’s Vision Pro, has emerged as a serious challenger to Foxconn.

Kyle Chan, who also works as a lecturer in the sociology department at the university, pointed out that Tata is even working with advantages that Luxshare didn't have. Chan was commenting on Tata's possible takeover of Pegatron's iPhone plant near Chennai after it took over Winstron's plant near Bengaluru.

Also Read: Pegatron in talks with Tata to sell its only iPhone plant in India: Report

Luxshare was founded in 2004 by a formidable Wang. Wang started working with Foxconn in 1988 as a 21-year-old factory worker. She soon rose through the ranks and was part of the electronics manufacturer's journey to the number one position. Then, she started her own company that is now a challenger to her former employer.

Chan wrote, "The original big 3 contract manufacturers—Foxconn, Pegatron, and Wistron—are all Taiwanese. Luxshare, a Chinese competitor, was co-founded by Grace Wang, a former 'factory girl' at Foxconn’s first factory in Shenzhen in 1988. Wang learned from Foxconn and started by making low-end parts for iPhones and MacBooks."

Then Luxshare acquired factories from Wistron and then from Pegatron, much like how the Tata Group seems to be doing now.

Chan wrote, "In 2020, Luxshare entered into iPhone production by acquiring two iPhone factories from Wistron. It also took over Pegatron’s last iPhone plant in China in 2023. Luxshare is now the second-largest iPhone maker after Foxconn."

He pointed out that Tata has many advantages that Luxshare didn’t have: access to capital, government connections, and pre-existing manufacturing know-how.

Also Read: Tatas to start making Apple iPhones in India after $125-million Wistron plant deal

"The key will be whether Tata can learn enough from the Wistron and Pegatron plants it’s acquiring to challenge Foxconn, which currently dominates iPhone production in India," he wrote.

While Luxshare seems to be changing its focus to manufacturing in Vietnam, for multiple reasons, including China-India tensions, Tata is planning a new iPhone plant in Tamil Nadu that it hopes will employ 50,000 workers and start operating in 12–18 months, wrote Chan.

According to the researcher, the group's rapid expansion into iPhone production has been timed well. It goes along with India’s broader efforts to win a greater share of global manufacturing, particularly when many companies such as Apple are looking to diversify manufacturing away from China.