Infiniti Looks to 3.0L Diesel to Boost European Sales

ROME – Nissan Motor Co. Ltd.’s Infiniti brand is launching its M sedan here, counting on the vehicle’s 3.0L Europe-only diesel engine to propel the marque toward viability.

The luxury brand had a slow introduction in Western Europe following the Paris auto show in 2008 with the establishment of a showroom in Paris and another in Rome.

“We competed with only gasoline engines and four vehicles, the G sedan and coupe (and) EX and FX (cross/utility vehicles),” says Wayne Bruce, head of communications at Infiniti Europe.

Since then, Infiniti has added the G convertible to its lineup in Europe, and two months ago introduced a 3.0L V-6 diesel engine sourced from the Renault SA-Nissan alliance. “We used to cover 4% of the luxury market,” Bruce says. “Now, we compete in 28%.”

In Europe, diesel engines are installed in about 80% of luxury cars, and Infiniti’s previous dependence on gasoline powerplants limited the brand’s appeal.

As a strategy, Bruce says Infiniti decided to offer only V-6, high-performance versions of its cars so it could position itself as performance first and luxury second, in a marketplace battle aimed at leader BMW AG.

The M sedan is a competitor to the BMW 5-Series but at a lower cost. Gasoline versions already are on sale in the U.S. and other markets.

M30d diesel to help Infiniti double sales this fiscal year.

The 3.0L diesel engine makes 238 hp at 3,750 rpm and 406 lb.-ft. (550 Nm) of torque at 1,750 rpm in the M30d GT Premium. The 3.7L gasoline V-6 is rated at 320 hp and 272 lb.-ft. (369 Nm) in the M37S sport version.

Both the diesel and the gasoline engine get 27.7 mpg (8.5 L/100 km) in the combined New European Driving Cycle, but neither is close to the desired 140 g/km of carbon-dioxide emissions goal set in Europe for this year. The diesel emits 199 g/km of CO2 and the gasoline V-6 produces 235 g/km.

The M35h, a hybrid version coming next April, presumably will improve the gas engine’s score.

However, Infiniti’s plan for major CO2 improvements is linked to the 2013 introduction of an electric car, and the later rollout of a compact vehicle the size of the BMW 1-Series and Audi A3.

The small Infiniti presumably will use 4-cyl. diesel and gasoline engines sourced from Daimler AG. In April, Renault, Nissan and Daimler invested small amounts in each other and agreed to share some technology and platforms.

Infiniti could not offer powerful diesel engines by itself, says a spokesman, due to the low volumes involved. The V-6 diesel is used in different variants by the front-wheel-drive Renault Laguna and Nissan Pathfinder SUV.

In the last fiscal year ended March 31, Infiniti sold about 3,000 vehicles in Western Europe, led by the FX37 CUV, which had been the second-most popular gray-market import behind the Ford Mustang.

This fiscal year, Infiniti intends to double its sales, thanks to the M30d diesel and a gasoline version of the M37. Infiniti currently has 37 dealers in place and is adding new retailers every two weeks.

Infiniti executives are pleased with the progress achieved so far, says Bruce, particularly because the brand has the youngest buyers for a luxury marque, averaging 47 years of age.

Infiniti’s 5-year target is 25,000 units in Western Europe – about half the sales of Toyota Motor Corp.’s Lexus brand.

Although it overtly targets competitor BMW, Infiniti may be aiming at Lexus indirectly. If it reaches 25,000 sales, the auto maker could catch up to Lexus, whose deliveries have been slowly declining since reaching a peak of 36,376 units in 2007.

Through September, Lexus sales in Europe totaled 14,499 units, on track for annual deliveries of about 20,000.

Renault-Nissan CEO Carlos Ghosn in 2002 said matching Lexus in sales was not important.

“We are driven only by profitability,” he said at the time. “If you aren’t profitable long-term, you aren’t doing things correctly. Normally, growth is linked to profitability, but we don’t look for growth for its own sake.”

In the U.S., Infiniti sold 74,797 vehicles through September, compared with 162,438 for Lexus. Infiniti entered the U.S. market at the end of 1989, a few months after Lexus, while in Europe Lexus had a 10-year head-start.

Where Lexus stores in Europe often are integrated with Toyota, Infiniti chose to demand standalone showrooms in each country be operated by independent investors.

In Italy, the Fassina SpA dealer group now has five showrooms. Mauro Armellin, manager at the Infiniti Center Rome, says his two salesmen sold about four cars a month in the first year, and now are selling about 12 a month.

The dealership will be profitable at 15 units monthly, he says. “After six years, Infiniti will be established.”

While Infiniti began in 1989, its second life was ushered in with the Nissan 180 plan under Carlos Ghosn. The executive mandated Infiniti vehicles should be developed uniquely and not as transformed Nissans. Thus, while earlier generations of the M sedan essentially were rebadged versions of the Japanese market Nissan Fuga, the current Fuga is a rebadged Infiniti M.

Another key part of the Infiniti revival has been design. Whereas early Infinitis did not resemble each other, the brand’s lineup now has a family look, with fenders swelling above the long hood. Designers also have given much attention to interior details, such as the silver powder rubbed into the wood grain on interior trim in the M.

“In Italy, to sell something, it has to be beautiful,” says Armellin of Infiniti’s Rome dealership.