Sony plans raising local sourcing to offset import duty hike

To offset the import duty hike on electronic products, Sony India today said it will raise local sourcing to 55 per cent in the current fiscal, up from 30 per cent now.

"Domestic production is now 30 per cent and with change in the regulatory environment, we plan to raise domestic production to 55 per cent," Sony India sales head Satish Padmanabhan said.

He was speaking to reporters adter the launch of Bravia OLED TVs and offers for the upcoming football season.

In December last year, the government raised customs duty on various electronic products including mobile phones, microwave ovens and cameras to boost local manufacturing and create jobs.

Sony India's local production is through contract manufacturing via a tie-up with Taiwanese firm Foxconn.

To a question if Sony India will consider setting up manufacturing on its own, Padmanabhan said the third party production arrangement has been successful for the company so far.

Sony will continue to import fully-built TVs from 65 inches and above, audio products and cameras as well as few mobile phones.

He said raising local production level will help revive some of the lost margins due to hike in customs duty which was absorbed.

Customs duty for completely built units had been raised to 20 per cent from December last year.

Sony is hoping to cash in on the upcoming FIFA soccer fever which may offer a 10 per cent additional rise in demand nationally and 50 per cent in the markets of West Bengal, North East and Kerala where football is a very popular sport.

Sony India claims to have a 25 per cent marketshare in TVs which it plans to raise to 35 per cent by 2019.

The Japanese electronic major will launch at least four new models and initiated local football-led marketing campaign.

TVs under the brand 'Bravia' accounts for 60 per cent of its revenue in India.

The company is seeing traction in audio and high-end imaging products segments and expects their contribution to rise in the mid-term (2-3 years), Padmanabhan said.

Sony is also exploring contract manufacturing for audio products. However, the company declined to share further details.