Chinese+Refrigerator+Maker+Finds+U.S.+Chilly+-+WSJ -...

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Chinese Refrigerator Maker Finds U.S. Chilly - file:///C:/Documents%20and%20Settings/Brian/Local%20Settings/Temp. .. 1 of 4 7/7/2008 12:13 PM DOW JONES REPRINTS This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, use the Order Reprints tool at the bottom of any article or visit: . See a sample reprint in PDF format . Order a reprint of this article now . [Go to slideshow] 1 Mei Fong See photos from Haier's factories in China and South Carolina. [Zhang Ruimin] The Wall Street Journal March 18, 2008 Chinese Refrigerator Maker Finds U.S. Chilly By MEI FONG March 18, 2008; Page B1 Camden, S.C. While Western companies cast a covetous eye at China's huge consumer population, Zhang Ruimin, the chief executive of one of China's largest appliance makers, was ogling the U.S. His plan: Build a signature, $2,000 refrigerator in America to capture a bigger slice of the lucrative U.S. market. Mr. Zhang's strategy brought Haier Group closer to its potential customers and avoided the cost of shipping bulky appliances from China. But since it was introduced last year, the new high-end refrigerator has been given a cool reception. Tom Torgerson, senior buyer at ABC Appliances, says his chain of more than 40 Midwestern stores sold only about 50 of the Haier convertible fridges in the first few months of the product's launch last year. "Haier's name recognition is small," he says. One of China's biggest consumer brands, Haier makes more than twice the number of refrigerators in a year made by Whirlpool Corp. Even though it is the leading seller of compact fridges used in dorm rooms, it is still a mere pipsqueak in the $40 billion U.S. market, where it has been selling mostly lower-cost appliances for years. Growth overseas is crucial for Haier because profit margins from the company's core products in China -- refrigerators and washing machines -- are razor-thin thanks to increasing foreign competition. That pressure has increased since 2004, when Haier made an unsuccessful attempt to buy Maytag Corp., losing out to Whirlpool. But Haier's U.S. ambitions have run up against hurdles. The new refrigerator, which allows consumers to set specific temperatures for individual compartments, was designed and built at Haier's South Carolina factory, at 10 times what it would cost the company to make in China. The downturn in the U.S. economy crimped consumer demand just as the company's
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This note was uploaded on 12/31/2009 for the course BIZ 178 taught by Professor Meford during the Fall '09 term at Berkeley.

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Chinese+Refrigerator+Maker+Finds+U.S.+Chilly+-+WSJ -...

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