Thursday, January 24, 2013

Exec Says Nissan Considered Killing Infiniti, has Plans for an "Emotional" (GT-R-Based?) Flagship

It may come as a surprise but the Infiniti Q50 sports sedan may have not made the waves it did at this year’s Detroit Auto Show – in fact, the whole Infiniti brand may have ceased to exist by now, according to Nissan vice president Andy Palmer.

In an interview at the 2013 North American International Auto Show in Detroit, Palmer told Wards Auto that, when he expressed his doubt about whether the group would be better off without Infiniti and its ho-hum performance, CEO Carlos Ghosn “challenged me and said ‘We don’t have to do Infiniti, you can cancel it if you want”.

Despite Infiniti’s ho-hum sales record, there is a good reason Palmer did not say “yes”: due to their high pricing and margins, premium brands bring in nearly half the profits of the mainstream parent automakers.

In order to do so, though, they have to be successful. Palmer could see a brighter future for Infiniti only if Nissan committed to do things in the right way.

“Infiniti has nice premium cars but, frankly, they’re kind of discount”, said Palmer. “And we’ve been selling those cars over a period of 23 years with a Nissan-push mentality.”

Keeping the mainstream and premium brands at a comfortable distance from each other is not an easy task but VW has done so with Audi.

Palmer figured that, if you can’t beat or join them maybe you can hire the man who made this possible. In Audi’s case, that man is Johan de Nysschen.

De Nysschen was head of Audi in the U.S. for seven years. During that period, sales increased from 77,917 units in 2004 to 117,567 in 2011 and the brand joined the ranks of BMW and Mercedes-Benz as a bona-fide premium manufacturer.

Nissan’s VP wanted “the best man at Audi”; but acknowledged that he wasn’t going to get him “unless you’ve got some reason for him to come”.

The deal included a joint venture with Daimler, relocating Infiniti’s global HQ to Hong Kong and, thus, closer to the Chinese market, and giving the green light to the Q50 and the JX crossover.

After becoming Infiniti President on July 1st 2012, one of the first things de Nysschen asked was for the previously announced global sales target of 500,000 units annually to be pushed back a year, from 2016 to 2017.

“I need some time; I don’t want the volume pressure”, he told Palmer. “What I’ll give you ultimately is a premium brand. And somewhere, by developing a premium brand, you’re not going to be disappointed by the profitability and volume that comes.”

Last year Infiniti shifted nearly 200,000 vehicles globally, so it was an ambitious target to begin with, even with four new models and a revamp of the existing range due in the next four years.

For the brand’s new boss, reaching the 500,000 sales target “in 2017 or 2020 is less important than developing the brand metrics which entrench Infiniti as an unquestioned member of the club of premium automotive brands. That is our mission.”

Said mission may also include a new flagship placed above the M. Currently, it’s not clear what segment it would be positioned though de Nysschen is adamant that it won’t be an executive sedan to rival the Mercedes-Benz S-Class, BMW 7-Series or Audi A8.

“That segment is stagnating”, he commented. “No, we plant to produce a very emotional car, very progressive, perhaps even provocative in design”.

It will be positioned as a niche model in terms of pricing but, says de Nysschen, “Many people would want it due to compelling features and design”.

Now, we’re just thinking out loud here but the new Infiniti boss, in his open letter explaining the brand’s new naming strategy last year, talked about a “new high-tech 550+HP performance flagship…using a potent charged induction V6”.

Is there such an engine in Nissan’s arsenal right now? You know the answer, and it lies under the hood of the GT-R. Moreover, in February 2012, Ghosn said about the possibility of Infiniti using the GT-R as a base for a model of its own: “If your question is ‘could we do that’, I would say ‘yes’. All technologies developed for Nissan are available to Infiniti.”

That’s just educated guesswork (or wishful thinking), of course; the above statements really gets you thinking though, doesn’t it?

By Andrew Tsaousis
Story References: Wards Auto
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