Japan Likely to Retain Production Base for Large Infiniti Models

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Greater L.A. Auto Show

LOS ANGELES – Infiniti plans to source its new JX cross/utility vehicle debuting here from outside Japan, contrary to the rest of its lineup. Production will begin next spring at Nissan’s Smyrna, TN, plant.

The JX may not be the only Infiniti model to move away from a Japanese production base.

“I think it’s fair to say we’ll always build Infiniti models in Tochigi, because that’s the mother plant and we intend to keep it that way.

But it’s also a fact the yen is a factor,” Andy Palmer, Nissan executive vice president, tells WardsAuto on the sidelines of the auto show here.

Nissan has been able to maintain most Infiniti production in Japan by sourcing parts from lower- cost countries with more favorable currency exchange rates, such as the U.S., Korea and Europe. But this arrangement may not be enough to offset the strong yen.

For this reason, Palmer says Tochigi production may make sense for only the biggest Infiniti models. “The larger cars where you’ve got more wiggle room (in pricing) will tend to be from Japan.”

While the JX is a large Infiniti, seating seven passengers, the decision was made to build the model state side before the yen strengthened, he says.

Infiniti U.S. sales through October numbered 79,043 units, down 4.5% from like-2010. But given the severely limited supply of units for nearly three months due to Japan’s natural disasters, Palmer is pleased with the number.

New Infiniti EV similar footprint to Nissan Leaf.

Reaching 100,000 sales for 2011, a figure more familiar to Infiniti, is “going to be tricky to do. But at the same time, it’s better than we were looking six months ago,” Palmer says of post-quake pessimism.

He does not blame Infiniti’s U.S. slump entirely on the earthquake, noting strong demand for the EX and FX CUVs in China also limited U.S. supply. Both are best-sellers there.

Despite the setbacks, Infiniti sales globally are headed for a record as the brand continues to branch out into newer markets. But Palmer also says Infiniti now is attracting more affluent customer in the U.S., on which he places more importance than sales volume.

During the JX presentation here, he reiterates Infiniti’s plan to launch an electric compact sedan by 2014 for the ’15 model year.

The new EV will see a similar, if not better, performance to Nissan’s Leaf, thanks to a second-generation lithium-ion battery pack.

“Without getting into the technical definition of what that means, it benefits from the next kaizen (continuous improvement), but it’s not a radically all-new battery pack,” Palmer says.

The car will have some “very cool technology,” which will be revealed at a later date.

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