Even With New Leader, Infiniti Struggles For Upper Echelon

Jan 27 2014, 10:36am CST | by

Even With New Leader, Infiniti Struggles For Upper Echelon

Johan de Nysschen declared at the Detroit auto show this month that Infiniti will “continue to surprise,” 25 years after Nissan launched its U.S.-centric luxury brand at the same North American International Auto Show.

But so far, it’s de Nysschen who has been surprised — by his inability to turn around the flailing brand quickly after he began posting better results almost immediately during his earlier revival of the Audi of America franchise.

Infiniti sales have vastly underperformed de Nysschen’s expectations of making rapid improvements after taking the helm of the struggling brand 18 months ago. So far de Nysschen hasn’t been able to effectively apply his old magic, and Infiniti’s growth has stalled while other premium marques have continued to accelerate.

Infiniti will “move well beyond 500,000 units by 2020″ in worldwide sales, de Nysschen declared at the show, which is actually somewhat short of the 600,000-unit goal that was reported for the brand when it hired him after a great turn in leading Audi to annual double-digit sales gains in the U.S. for several years running.

In 2013, Infiniti’s U.S. sales actually declined by 2 percent, to about 116,000 units, while those of rivals Lexus increased by 12 percent, for instance, and Audi by 13 percent.

And de Nysschen may have pared back his initial hopes that Infiniti could eventually play with the gorillas of the segment. “We’ll be a significant player in the premium market, but we’ll still be small enough to be able to be exclusive,” he said at Detroit.

De Nysschen is said to be frustrated with the inner workings of Nissan as well as with the outer results. Another problem is a lack of product breadth: At this point the brand is represented in segments that account for only 58 percent of all American luxury-car sales.

But in Detroit, de Nysschen declared that Infiniti’s plans to grow dynamically have not waned and that the brand intends to ride a combination of broader segment representation, robust new vehicles bearing a fresh design language, new powertrains and more significant presence in new global markets to greater success.

Michael Bartsch, Infiniti’s vice president of the Americas, said that Infiniti is likely to move about 125,000 vehicles in the United States during the current fiscal year which ends in March, which in itself would be a 7-percent uptick in the annualized rate over Infiniti’s calendar-2013 performance — and, thus, quick progress.

Substantially, that growth will be driven by the impressive Q-series Q50 sedan that Infiniti introduced last year. Over the last two months in the U.S., Bartsch said, Infiniti has sold more than 10,000 Q50 units, and more than half of the buyers have been “conquest” customers.

Infiniti expects to introduce next year a version of its smaller Q30 sedan in the US, and it displayed a Q50 Eau Rouge concept vehicle at the show that is likely to influence future versions of the Q50 and possibly a performance-focused sub-brand, much like how parent company Nissan has its GTR line-up.

Globally, de Nysschen said, China is key. Infiniti will open a plant in China later this year. And as if to underscore Infiniti’s global brand relevance, he noted in Detroit that songstress Katy Perry had just performed for Infiniti at an event in China.

The brand, de Nysschen said, is “hard at work building momentum.”

Still, Bartsch said, “Our focus is not on quantity but on the quality of our business.” He said that a “major task is building the reach of the Infiniti brand and its premium nature [and] making it easier for [American] customers to experience it.”

Source: Forbes Auto

 
 

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