DETROIT – Nissan North America Inc.’s Infiniti brand can be forgiven for being nostalgic.

The luxury marque last year enjoyed the largest sales increase among its competitors, up 27.5%, giving the brand its best share of the segment.

But to be a credible Tier-1 luxury marque, Infiniti needs a “high-priced, halo flagship model,” Brian Carolin, NNA vice president-sales, tells Ward’s in an interview at this week’s North American International Auto Show.

Infiniti’s sales of 103,411 units trailed by a wide margin the 200,000-plus volume the BMW, Mercedes-Benz and Lexus brands each racked up in 2010.

Nor does it enjoy the positive press of current media-darling Audi AG, despite outselling the German brand last year in the U.S. by a couple thousand units.

What the four top luxury bands have in common are pricey high-performance halo cars that lure buyers into showrooms, even if they can’t afford to buy them.

This has Nissan/Infiniti officials debating whether a sedan, similar in strategy to the BMW 7-Series and favored by company officials two or three years ago, is the best game plan going forward or whether a super sports car, such as the Audi R8, would be optimal.

“It’s kind of perennial debate within the organization: ‘What do we need by way of a flagship for the Infiniti range?’” Carolin says. “I don’t think we’ve yet arrived at a conclusion,” he adds, calling the flagship decision “a work in progress.”

Two years ago, Infiniti was touring the U.S. with the Essence concept supercar to gauge public reaction. Brand officials at the time said the economy would need to improve for it to see production.

An entry-luxury model also is under study, although less certain. “As usual in the car business, it’s: ‘Can we make it pencil,” Carolin says of such a model’s profitability. The segment is small but growing, filled right now by the BMW 1-Series, Volvo C30, Audi A3 and upcoming Lexus CT 200h.

Nissan officials once thought the new, smaller-engine G25 could fill the niche, but Carolin says that model does not meet the sniff test. “I think (an entry-luxury car) would have to be a very different product, (on) a different platform.”

Still basking in the glow of last year’s success, Carolin predicts more upside for Nissan’s luxury brand in 2011. The first full year of the Infiniti M sedan and QX large SUV, plus the G25, should boost sales he says, noting the QX was in short supply for 2010.

cschweinsberg@wardsauto.com