Infiniti Looks for Global Growth

Nissan's Infiniti luxury brand is on a quest to penetrate world markets and hopes to continue to expand its global presence throughout 2013, despite some struggling key regions.

Formerly available exclusively in the U.S., Infiniti now has sales operations in Russia and China, its No.2 and No.3 markets, respectively, plus Indonesia, Chile, the Dominican Republic, South Africa and Australia.

The auto maker will launch sales in Hong Kong, where its new headquarters is located, before the close of this year.

Infiniti’s confidence is due in large part to new leadership, with former Audi of America CEO Johan de Nysschen taking the helm. During his seven years at Audi in the U.S., sales grew 51%. Nissan lured him away in June, no doubt hoping he can work that same magic for the Japanese luxury brand worldwide.

While it may seem de Nysschen stepped away from a good thing at Audi, he makes no apologies. “What car guy wouldn’t jump at the opportunity to be able to run a major automotive brand?"

In an email interview with WardsAuto, the new Infiniti senior vice president discusses possible roadblocks to the brand’s growth in 2013, the need to be smart about capacity expansion and how he plans to get Infiniti breathing the same rarefied air the Germans enjoy in the Tier 1 luxury segment. Following is an edited version of that interview:

WardsAuto: What is your outlook for the European market for 2013, and how will it affect your business performance?

De Nysschen: Infiniti is still a very young brand in Europe, having launched there just four years ago. Europe remains a tough market in which to launch a new premium automotive brand, as there are many established "home team" players. And the current economic market also hinders our growth there.

Europe does, however, have great potential, and we believe that our best opportunity for the market is when we offer additional diesel models and expand our portfolio of smaller-displacement engines.

In addition, we will be entering the premium-compact segment with an entry that will be built in Europe. These things are firmly in the product pipeline for Europe in the future.

WardsAuto: Do you see the need to increase, decrease or maintain your global manufacturing capacity in the coming year? Which market segments are ripe for expansion and which face rationalization?

De Nysschen: In the coming year, Infiniti’s manufacturing capacity will remain basically the same, having added production of the Infiniti JX in Smyrna, TN, in 2012. However, our global growth requires us to consider how we will expand production.

We have already announced that we will begin production of Infiniti vehicles in China, to begin in 2014. Infiniti’s premium compact model is due to be produced in Europe toward the end of 2014.

As for market segments, Infiniti remains in an expansion mode, although new market introductions will not be as aggressive as they have been in the past few years. We still see potential for additional sales in China, the Middle East and Russia and, as new products are added, we continue to see potential for growth in the Americas.

WardsAuto: What sort of challenges remain in globalizing product platforms?

De Nysschen: Product portfolios for premium brands are typically smaller than mainstream auto makers, which allows us to be more focused. The biggest challenge remains the powertrain variations that are required for different markets. But as fuel economy needs and emission regulations become more relevant for consumers across the globe, this may not be as difficult as it has been in the past.

Being successful as a global, premium automotive brand requires a full complement of powertrains, and that’s an area where Infiniti still has some work to do. Our partnership with Daimler (which has Nissan assembling Daimler-designed 4-cyl. engines in Smyrna for the next-generation C-Class and an unnamed Infiniti) will help this situation as soon as 2014.

And we are benefiting from the technology developed as part of the (Renault-Nissan) alliance partnership (with Daimler) as announced at the Paris motor show. Infiniti will receive a new transmission in vehicles starting in 2016, with (Japanese supplier) Jatco planning to manufacture these newly licensed gearboxes in Mexico. The new transmission will feature start-and-stop and park-and-shift by wire technologies.

WardsAuto: Do you see China’s luxury sector slowing with the rest of the Chinese industry, or will it grow at faster pace than the mainstream sector?

De Nysschen: Let’s just say that Infiniti chose Hong Kong for its global headquarters for a reason. We believe this will continue to be a growth market for us. Infiniti has a great product portfolio for China, and we have developed models just for this market, such as the Infiniti M (long-wheelbase) sedan. And we have announced we will have a production facility there as well.

WardsAuto: Infiniti has not been seen as a Tier 1 luxury brand in the past. In your opinion, is it now and if so, why? If it’s not, what will it take for Infiniti to achieve Tier 1 luxury status?

De Nysschen: Infiniti has a great product line and has always excelled at its goal of an ownership experience that’s second to none. But the brand has never unlocked its true potential and been considered amongst the top premium brands.

For the first few months of my appointment as Infiniti’s first president, we’ve embarked on a full internal and external review of the brand and its potential, and I’m not ready to share the findings nor the plan of action we will take.

I will say, however, it’s no secret that Infiniti needs to better separate itself from the corporate parent and also have flagship and reward models at the top of its line that consumers aspire to.

WardsAuto: Why is Infiniti still pursuing a luxury EV when the market seems indifferent to electric vehicles? The Leaf and EVs from Fisker and Tesla aren’t setting sales records.

De Nysschen: We believe there is a need in the marketplace that will be fulfilled by Infiniti’s zero-emission luxury sedan, which has been previewed by our Infiniti LE Concept.

First, demographics of electric vehicles are quite desirable with very high household incomes. Typically electric vehicles have luxury vehicles as garage stablemates, but those are from mainstream brands. Therefore, we see an opportunity for a premium, 100% electric luxury car.

Second, with our corporate parent being the leader in zero-emission vehicles, we can offer the latest and greatest technology. For instance, we expect our entry to be the first to market with wireless charging capability – no need to plug it in to charge.

And finally, we offer an established, worldwide retailer network that allows buyers a sense of credibility and confidence that some of the startup manufacturers cannot match.

WardsAuto: You had a very good gig at Audi. Why leave and go to a brand that doesn’t have as a solid footing in the luxury segment?

De Nysschen: I’m excited about this opportunity at Infiniti or I wouldn’t be here. This will be my third experience at building a luxury brand, but this gives me the opportunity to do it on a global basis. And what car guy wouldn’t jump at the opportunity to be able to run a major automotive brand?

Bottom line, I look forward to the time I can look back at the success we’ve had at establishing Infiniti as one of the world’s premium automotive brands, a distinction it deserves due to its product line and ownership experience.

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