A Deeper Look at Some
Famous Brands and their “Country of Origin”
What Does It Mean?
What do you think of when you see the names G.M., Volkswagon, Vespa, Benelli,
Sony and Nike?
Normally, we associate a brand name with a country. Ex. Vespa = Italy, G.M =
U.S.A, Sony = Japan, etc.
What would surprise many people today is that the above association is no
longer clear or useful. We have been in assembly plants where products
bearing all of the brand names above were being produced, packaged and
shipped all over the world. Where were those plants? CHINA!
What is usually happening is that these companies contract with Chinese
businessmen and their companies to assemble the G.M. or Vespa or Sony
products, in the Chinese plant. The difference between these branded
products assembled in China, and standard, off-the-shelf Chinese products
made for sale inside China, is that the name brand product is built under
strict quality and specification controls of the non-Chinese company.
For example, many Sony CD and DVD players are made in China and sold in the
U.S, Europe and around the world using the design, components and QC
procedures developed and controlled from the Sony Corporation headquarters
These “Contract Manufacturers/Assemblers” operate very efficiently and at
low cost because they only need to charge enough to cover the direct cost of
labor and materials. Those costs are very low in China. They have no R & D,
advertising, promotion, legal or marketing costs because they are
manufacturing directly under contract for a specific number of items and
they are guaranteed payment before they ever start production. No storage
costs, little or no “overhead” costs, and very little risk. Usually what
overhead costs they do have are covered by their domestic Chinese sales of
This method is commonly used today by the vast majority of companies selling
durable goods of any type. They cannot afford to do otherwise or their
competitors will take their market. The key is that the quality and
specifications must be controlled by the brand name company, be it G.M.,
Sony, TN'G, Benelli, Vespa or Nike.