Long Wait for Turbo, Amortized R&D Keeps G37 in Infiniti Lineup

IRVINE, CA – Infiniti’s decision to continue to offer the G37 puzzled industry-watchers when the news was announced earlier this summer.

The Japanese luxury brand has been pushing its new “Q” nomenclature for its cars, and the G’s replacement, the ’14 Q50, went on sale in early August in the U.S.

But with smaller-engine competitors becoming a growing block of lower-luxury sedan sales and the Q50’s downsized engine not available until 2015, the case was clear for the lower-priced G to remain in the lineup for now, a top Infiniti official tells WardsAuto.

“In launching the Q50, we want to make sure the car does not become a victim of the fact that the current entry engine is a 328-hp V-6,” Johan de Nysschen, president-Infiniti, tells WardsAuto at Nissan’s recent 360 media event here.

As part of its pact with Daimler, Infiniti’s Q50 will receive the Mercedes CLA’s 2.0L direct-injected and turbocharged 4-cyl. gasoline engine making 208 hp and 258 lb.-ft. (350 Nm) of torque. However, Infiniti will be sourcing the engine from Nissan’s Decherd, TN, plant, where a new engine-assembly line is under construction and won’t open for another two-and-a-half years.

“It’s very clear that in that particular market segment the action today is in the 4-cyl. category,” de Nysschen says. He cites the turbocharged trio of the Mercedes C250, which uses a 1.8L 4-cyl.; the Audi A4 and the BMW 328i as having what he calls the “sweet spot” for transaction prices.

All three begin in the mid-$30,000 range in the U.S. The A4 has the lowest price of $33,800 and the 328i is the highest, at $37,100.

While the ‘14 Q50, which starts at $36,700, seems to fit nicely within that group, Infiniti officials think the G is an even better starting point, and its presence doesn’t risk the Q50 having to be discounted.

“We (saw) with G that our dealers had responded to (small-engine competitors) by slowly steering transaction prices to the sweet spot,” de Nysschen says.

“And if we want to begin to work very hard to turn Infiniti from a well-respected and regarded value brand to a well-respected and regarded brand which should be valued – there’s a difference – then we can’t do the same thing with Q50. We put too much into it.”

The G37, with virtually the same 3.7L V-6 engine as in the Q50, begins at $32,550 for ‘14. Adding all-wheel-drive boosts the price to $34,150. The sport-grade G37 with a 6-speed manual transmission is $37,150.

“We decided to capitalize on the fact that G is still a fine automobile, its R&D is fully amortized (and) the tooling is fully depreciated, which means that we could re-price the car into that sweet spot in the market, thereby providing our dealers with a compelling alternative.”

While the G is “a little bit older,” having launched in 2007 as an '08, de Nysschen says it “is still very competitive and it provides much more power and performance than any other competitor in the price point.”

Nissan not only will be assembling the 2.0L turbo 4-cyl. for the Q50, as WardsAuto reported in May, but it also will supply the engine to the CLA, which it will build from April 2017 alongside an Infiniti derivative at its vehicle assembly plant under-construction in Aguascalientes, Mexico.

The CLA, on sale now in Europe and arriving in the U.S. this fall, currently is built at Mercedes’ plant in Kecskemet, Hungary.

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