SB- I am not doing any research on this, but I am assuming that, previously, (previous to summer '98), all units sold in China were made in Malaysia...now that production has begun in China, I am assuming that the "loss" that is being referred to is (1) right-down of manufacturing/distributing costs (think of all the people they are hiring right now...many of whom are not so productive for a while)...
heavens knows the (upfront) charges that the Chinese government (city, state, federal) may be adding on... (2) Aggressive capture of market share....with a direct sales force, they are probably given more leeway to "win accounts" on price, then in more established countries...I am assuming, again without research, that Dell did not have an existing direct sales force in China previous to this summer...
There is (obviousy) a big fixed cost investment that goes into having local manufacturing facilites...in the long-run, this reaps enormous benefit...but in the short-term, it can run losses.
Not to worry, I think these guys know what they are doing <g> |
