‘De-Americanizing’ Brand, Bigger Vehicles, Seen as Keys to Infiniti Prosperity

IRVINE, CA – Nissan’s Infiniti luxury marque launched in 1989 in the U.S. and for nearly 20 years was available only here.

That changed in 2008 with the brand’s move into Europe.

Now Infiniti is in dozens of countries, but still finds itself with a lineup that is too Americanized, President Johan de Nysschen says.

“Our strong U.S.-centric focus has driven product strategy, and for Infiniti to be positioned as a strong contender in the premium market, we really do need to break the mold of (that) very strong focus,” de Nysschen tells WardsAuto in an interview.

“I mean, goodness, the entry-level engine on an Infiniti is a 330-hp V-6,” he says, referring to the 3.7L VQ V-6 in the G, M and Q50 cars, and the EX and QX70 cross/utility vehicles.

But a plan is under way to “de-Americanize” Infiniti for Europe and other global markets, assures both de Nysschen and his boss, Nissan Executive Vice President Andy Palmer.

Key to that plan is Infiniti’s relationship with Daimler, which is supplying a 168-hp 2.2L direct-injected 4-cyl. turbodiesel engine for European copies of the new Q50 sport sedan.

Palmer blames Infiniti’s strategy of offering large gasoline engines in Europe, which he calls the “wrong” engines, as the reason for the brand’s underwhelming sales in the region.

In Europe’s largest new-car market, Germany, WardsAuto data shows Infiniti sold just 874 units last year compared with Mercedes’ 353,447.

Also key to Infiniti’s plan to appeal to buyers in markets beyond the U.S. is, strangely, bigger vehicles. “Which is the opposite direction from where BMW and Mercedes are coming,” concedes Palmer.

“(But) they already have the reputation, and they’re coming down (to smaller-size segments) because there’s volume there. If we just go after the volume, we’ll never build the brand. So we have to look upwards.”

Competing with large cars that permeate German luxury brands’ lineups is a priority for Infiniti.

However, de Nysschen has spoken about avoiding a 2-box sedan competitor to Audi’s A8 or BMW’s 7-Series, for example.

Instead, Infiniti is studying a coupe-styled 4-door that would serve as its flagship model and could come to market as soon as 2018, de Nysschen confirms. Reports suggest the car will wear the Q80 nameplate.

And, despite rumors last year that it was dead, a production version of the Emerg-e extended-range concept sports car still is in the running.

“(A future production sports car) has a strong relationship with a motor and a battery,” Palmer says. “We do those concepts for a reason. You’ve got (the) Essence (2009 concept sports car) and you’ve got Emerg-e. At some moment or other, Infiniti needs a halo vehicle.”

Despite the new focus on larger cars, Infiniti isn’t ignoring the lower end of the market.

The Q30 concept unveiled last week at the Frankfurt auto show hints at a compact production model due in 2015, to be assembled at Nissan’s Sunderland, U.K., plant.

Derivatives of the car, which uses Mercedes’ CLA platform, also are expected, including a model WardsAuto first reported will be assembled by Nissan in Mexico in 2017.

Yet, Palmer says he’s cautious about introducing too many entry-level Infinitis.

“The difference between us and the other premium groups – coming down (in size) is not a problem, because we’re good at making small vehicles by virtue of being a mass manufacturer,” he says of parent Nissan. “But we have to be very careful not to pollute the Infiniti brand (cachet) by coming down too quickly.”

However, a cross/utility derivative of the Q30 is in the cards, Palmer says, noting Infiniti aims to be as “disruptive” with that model, expected to be called QX30, as it was with the quirky Qashqai CUV, one of Nissan’s best-sellers in Europe.

“The concept of (the QX30) is somewhat like Qashqai in that” it’s hard to classify, Palmer says.

Other Infiniti expansion opportunities include alternative powertrain models, although he and de Nysschen are cautious on this topic, too.

Full electrification, diesel engines in markets outside Europe and hydrogen fuel-cell powertrains are trendy, but may not provide the biggest bang for Infiniti’s buck, especially when it is seeking money to enter new markets and expand capacity, they say.

For this reason, the brand has delayed the introduction of its first all-electric model, to be based on the LE concept car.

“We absolutely have to now prioritize investments into addressing shortcomings in our product portfolio,” de Nysschen says. “Between now and 2020, (we may need) anywhere between $10 billion and $13 billion. That’s a lot of money, and we are not going to get a blank check from Nissan. We have to pay our way, we have to earn it, and so we have to prioritize our projects on the basis of their immediate commercial return.”

Delaying the EV, which will carry the Q badging when it does arrive, also affords the brand time to fit the car with the latest in battery technology, de Nysschen says.

WardsAuto forecast data shows the Infiniti electric vehicle’s U.S. introduction pushed ahead just one model year, from ’14 to ’15.

China represents a considerable growth opportunity for Infiniti, both executives say, which largely is why the brand located its headquarters in Hong Kong.

In 2014, Nissan’s joint-venture partner Dongfeng is to assemble a long-wheelbase Q50 and the QX50 CUV at a plant in Hubei province. The models will be specially designed for Chinese buyers.

Additionally, Infiniti plans to increase it Chinese dealerships from 60 stores to 80 by 2014.

“We’ll (get to) 80 in the next 12 months, but ultimately China has also got to become a second volume hub for the brand,” de Nysschen says. “In the long run, by 2020, we’ll need probably 150 dealers, 200 dealers there.”

Infiniti aims for 200,000 global sales this year, and 500,000 sometime late in this decade. The latter is a goal that became less clear once de Nysschen took the helm of the brand a year ago.

Dave Sullivan, analyst for AutoPacific, sees Infiniti’s biggest immediate needs as greater separation between powertrains, more product placement and establishing itself firmly in mature markets before entering developing regions.

Infinitis are “on top of each other,” Sullivan says, offering similar levels of performance, while the Germans have clearer delineation with turbocharged 4-cyls., supercharged V-6s and twin-turbo V-8s.

Meanwhile, placing Infinitis in movies and TV shows with global reach would pique buyer interest, he says.

“People aspire to own a BMW because you can drive it on the autobahn; movie stars are driving it,” Sullivan says. “That’s what Infiniti needs to be. It needs to be a symbol of what it says about you. I’m not sure the brand has that (cachet of): ‘This is what people in America drive; this is a sign of success.”

Greater product placement also would boost demand in developing and secondary markets.

Sullivan says Infiniti currently is “putting the chicken before the egg” by entering countries and not tending to them.

“You look at some of the markets they’ve tried to get into (such as) Australia. You go to their website and it hasn’t been updated in a year, 18 months. Those are the kind of things that are a little bothersome.”

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