Manufacturing in China (again)

200309020158_4374China is a topic that is commonplace, especially when talking about manufacturing and production. So it should not come as a surprise that the world’s largest piano manufacturer is Chinese state-owned Pearl River Piano Group. China has overtaken Japan and Korea as the largest piano manufacturer. Over 50 years old, Pearl River has gone from producing 4 upright pianos a month to 100,000 pianos annually in 2011. Their sales account for 28% of the Chinese market, 18% of the US market and 15% of the European market.

While Pearl River is renowned and has a large following in the Chinese market it has struggled in garnering international recognition. And by recognition I mean going beyond the number of pianos produced, sold or exported; I am talking about the brand and quality associated with it.

Chairman Tong Zhicheng best captures Pearl River’s vision saying that “Pianos are from the west so it must succeed there to prove the high quality of pianos”.  This explains why their strategy has been going beyond just piano manufacturing ever Here is a brief summary of the highlights and major steps Pearl River has been taking the last few decades:

1987- Pearl River begins to hire top talent from EU and US to develop skills and techniques for high-end products. David Campbell, former technical manager of Steinway is hired as company consultant

1995- Yamaha Japan pays attention to developments at Pearl River and forms a joint venture with them creating the brand Yamaha-Pearl River, boosting opportunity to gain more input on product quality and operations

1999- Pearl River acquires Ritmuller, a 200-year-old respected German piano brand

-Opened first sales outlet in US

2004- Formally opens European branch in Munich

2008- financial crisis decreases China’s piano exports by 70% but Pearl River’s profits increase nearly 18%

2008- Steinway shifts production of its Essex (affordable-line) piano brand from Korea to Pearl River in China

But Pearl River pianos are still regarded as entry-level quality.  A report from China Daily says that most of the workers in Chinese piano manufacturing are “migrant workers who lack professional knowledge and can hardly make pianos sound artistic”.  But so far, Pearl River has opened 235 sales outlets in over 100 countries and regions. And perhaps their strategy of acquiring existing brands and technical expertise internationally will change criticism towards their products and improve the “made-in-China” image, into a top-quality global Chinese brand. It seems like Pearl River (and China in general) is gradually buying everyone else out in order to be a global brand.

-JOEY

http://usa.chinadaily.com.cn/weekly/2012-03/30/content_14948772_3.htm

http://knowledge.ckgsb.edu.cn/2010/08/28/china-business-strategy/pearl-river-piano-building-a-chinese-brand-for-the-global-market/

http://www.pearlriverpiano.com/en/about.aspx

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