Infiniti Launches Q50 Output, Begins Global Expansion Drive

KAMINOKAWA, Japan – Nissan passes a major milestone this week with the first Infiniti Q50 sedan rolling off the production line at the auto maker’s Tochigi plant north of Tokyo.

The luxury sedan, formerly sold as the Infiniti G, will play a key role in brand’s plan to claim 10% of the global premium-car market, where it will compete against the BMW 3-Series, Mercedes C-Class and Audi A4 when it hits showrooms this summer.

Infiniti President Johan de Nysschen says the brand is targeting sales of 500,000 vehicles annually by the 2018-2021 period, with volumes possibly reaching 600,000 units.

“And we expect operating profits to be equal or greater than (those of) Nissan,” he says at the Q50 Job One ceremony here.

In fiscal 2012, Infiniti sales totaled 172,615 units worldwide, up from 153,986 the prior year and the previous 5-year average of 127,900.

Growth, de Nysschen says, will come in part from an expanding product portfolio that will include a new compact model planned for production at Nissan’s Sunderland, U.K., facility in 2015 and a car above the top-of-the-line Q70 (formerly Infiniti’s M series), plus several cross/utility vehicles.

Infiniti also will increase its global reach beyond the 47 markets in which the brand is sold today, de Nysschen says, reemphasizing strategies first revealed in December.

Currently, Infiniti vehicles are produced at Nissan’s Tochigi and Kyushu plants in Japan and Smyrna, TN, operation in the U.S.

Additional capacity is going into Dongfeng plants in China, where beginning next year long-wheelbase Q50 and QX50 models will be produced. RMB2 billion ($326 million) is being invested in Dongfeng’s Xiangyang plant, which builds the Nissan Teana, to raise capacity from 130,000 to 250,000 units.

Nissan CEO Carlos Ghosn, also in attendance for the Job One ceremony, does not rule out building a dedicated Infiniti plant in the U.S.

“There’s no doubt that part of our sales expansion will be in North America,” he says. “It’s logical. But we’ve made no decision.”

Nor has Nissan decided whether to introduce Infiniti to the Japanese market, although Ghosn confirms the matter is under study. Either way, the auto maker has no plans to phase out the upscale Skyline model, he says.

The Q50, which shares 90% of its components with the Nissan 370Z, will be available in both gasoline and hybrid versions. The hybrid, powered by a 3.5L V-6 and 50-kW (67-hp) electric motor and lithium-ion battery, is expected to account for 40% of Q50 production.

De Nysschen estimates total output will reach 100,000 units over the next 12 months. Tochigi plant capacity is 250,000 units annually.

Nissan generally is bullish on meeting Infiniti’s 2020 sales targets, mainly due to the weakening of the yen.

“The plant wasn’t viable at $1:¥75-¥80 exchange rates,” Ghosn says. “But it can compete at (the current) $1:¥100. And it can prosper at $1:¥110, the average of the past 10-15 years.”