Set up earlier this month after it received the clearance from the Foreign Investment Promotion Board (FIPB), the subsidiary will be headquartered in Bangalore.

Acer had approached FIPB with plans for a fully-owned subsidiary following the dissolution of its joint venture with Wipro earlier in the year. Acer India will manufacture, market and sell the Acer brand of PC products along with servers and notebooks in the country.

Currently, fully-built units are being imported from the parent company in Taiwan and sold through its multi-distribution channel partners including Thakral Computers and Unison Technologies as also Wipro, which continues tomarket Acer products through its network.

Acer India has so far sold 1,25,000 units in the country with sales touching 20,000 units in this calendar year up to September.

Acer is also working closely with systems integrators (SIs), who will address large accounts directly. In addition to Wipro, these SIs include CMC, Nelito, PCS and MOL. A strong synergy is being worked out to focus on the finance, banking, oil & gas, corporate and the government user segments.

Acer India will offer customised support plans for various segments of customers. ``We wish to be seen as a service company selling products and therefore, our marketing initiatives will be purely customer centric,'' according to the company's deputy managing director Bharath Gopalakrishnan.

The subsidiary of the world's third largest PC-maker will strive to make Acer a leading brand in the country, Acer India managing director Arun Sinha said.

INSIGHT
Firm seeks higher volumes

Having incorporated its subsidiary in India,Acer now plans to set up a local assembly plant. Since Indian consumers are price sensitive, a company that wants to succeed in the country has to offer its products at the most competitive prices. Importing fully assembled computers attracts higher import duties than importing individual components. Therefore, assembling computers locally would mean lower variable costs. However, the overall cost per computer assembled locally would be lower only if volumes are large enough. That the company is willing to make the investments shows that it expects sizable volumes in the Indian market.

Sarad Saraf