We should know more May 28 when parent Nissan will announce its 3-year plan going forward... (T)hey say that the Infiniti brand will be "revitalized" without further explaining what that means. We'll see...
And here's the not very encouraging answer:
June 01, 2020
Nissan plots an Infiniti reboot to cap revival
HANS GREIMEL -
Automotive News
TOKYO — Not long ago, the Infiniti premium brand aspired to move upmarket in the glow of Mercedes-Benz through a then-celebrated tie-up between Nissan Motor Co. and Daimler.
But the Japanese automaker, now wallowing in red ink and with Infiniti still groping for traction, is making an overhaul of the brand a centerpiece of its drastic new U.S. revival plan.
Under the strategy, Infiniti will no longer be a mini-Mercedes. It will be "Nissan-plus."
COO Ashwani Gupta outlined the Infiniti revamp last week as Nissan unveiled a revised four-year midterm plan.
Nissan's wider restructuring road map cuts billions in costs, slashes production capacity and trims the lineup to reemerge as a smaller, more profitable company. But part of that will mean high-end Infiniti will share platforms, powertrains and assembly plants with the mass-market Nissan brand in a move to boost product development efficiencies by as much as half.
Under the shuffle, Infiniti's trademark rear- wheel-drive coupe and sedans — epitomized by the Q50, Q60 and Q70 — may eventually die off. In their place would come a Nissan platform, possibly pulled from the Altima or Maxima sedans, that accommodates the company's e-Power hybrid setup.
Infiniti, which saw global sales stagnate and then fall over the past four years, will focus mostly on the U.S. and China and get its own high-performance variant of e-Power to set it apart from rivals.
"We will bring back Infiniti as Nissan-plus, in terms of product and technology," Gupta told
Automotive News in discussing Nissan's larger restructuring. The efficiencies brought by piggybacking Infiniti on top of Nissan are envisioned as powering a rapid rollout of new models.
The first Infiniti vehicles under the new approach should debut by 2023.
"Infiniti will be great again," Gupta pledged.
Correcting course
In many ways, Infiniti's woes are emblematic of the wider problems Nissan is trying to fix. For years, under the direction of former Chairman Carlos Ghosn, Nissan pursued a rapid worldwide expansion, pushing into emerging markets, moving higher into luxury territory, reviving the entry-level Datsun brand name and rolling out new commercial vehicles. In short, Ghosn's Nissan Motor Co. was trying to do everything, everywhere.
Last week, in announcing Nissan's worst net loss since Ghosn's first year at the company in 1999, CEO Makoto Uchida said a drastic restructuring is needed to set the company back on a profit path after years of expanding too fast into too many markets in the pursuit of lofty sales volumes."To continue our business and generate a profit under these conditions has been extremely difficult," Uchida said, adding that executives would take various compensation cuts in light of the losses. "For Nissan to overcome this situation, we must admit our mistakes and correct course."
Ghosn had wanted Infiniti to account for 10 percent of the world's luxury market and rack up annual sales of 500,000 vehicles. Instead, Infiniti's global volume peaked at 249,000 vehicles in 2018, before dropping 24 percent to 188,994 last year.
Global sales shortfalls left Nissan Motor overstretched and strapped for resources to renew the lineups. In the end, both the Nissan and Infiniti brands were often left flogging outdated vehicles with outdated technology.
As part of Ghosn's grand vision to establish a global megamanufacturer, he brought Daimler into the Renault-Nissan orbit through a 2010 deal with then-Daimler CEO Dieter Zetsche. Daimler took 3.1 percent stakes in Nissan and Renault. The two alliance companies took 1.55 percent stakes each in their new German partner.
The partnership was more casual than the linkup between Nissan and Renault. But through platform-sharing and manufacturing deals, Daimler would become a key supplier of Infiniti's portfolio.
As part of the deal, Daimler and Nissan jointly built a $1.4 billion plant in Mexico with capacity for 300,000 vehicles a year for Mercedes-Benz and Infiniti. In the end, the project only exacerbated Nissan's overcapacity problems. Last year, the shared plant in Aguascalientes churned out just 30,294 Infiniti QX50 crossovers.
Nissan still makes 2.0-liter turbocharged engines for both Infiniti and Mercedes at a factory in Decherd, Tenn., based on Mercedes engine architecture. But the slow-selling Infiniti Q30 hatchback and QX30 compact crossover, based on the Mercedes-Benz A-Class platform, were unceremoniously dumped in 2019 after only four years.
Today, Infiniti vehicles are made at six facilities around the world — two in Japan, two in China, the Mexico plant and Nissan's Smyrna, Tenn., factory, which makes the QX60 crossover. This is for a global lineup of only six main nameplates that generate worldwide volume of less than 200,000.
Under Nissan's midterm plan, called Nissan Next, the No. 2 Japanese automaker wants to cut about $2.78 billion in fixed costs. It also proposes to cut its global production capacity from 7.2 million to 5.4 million vehicles.
The reconfiguration will boost the company's factory utilization to 80 percent, from around 70 percent today. Nissan also will trim the number of nameplates 20 percent to shrink the global lineup to fewer than 55 models from 69. It will focus on a smaller number of more profitable core models and roll them out more quickly to bring the average portfolio age below 4 years.
The restructuring comes on the heels of a 30 percent tumble in Nissan Group's U.S. sales through March in an overall market that was down 12 percent. The Nissan brand fell 30 percent to 232,048 vehicles, while Infiniti slid 26 percent to 25,558.
In May, Infiniti's recently appointed global chairman, Mike Colleran, was re-tasked after less than two months to take over Nissan Division sales for the U.S. Succeeding him as Infiniti chairman, effective this week, is Peyman Kargar, a former Renault executive.
U.S. goals
Gupta, as the prime architect of the turnaround, said the U.S. strategy hinges on improved dealer relations and refreshed product.
"There is a fine line between quantity of sales and quality of sales," Gupta said. "Last year, we really choked the dealers. But now we have restarted. We have great product and great dealers and now are connecting both with a sustainable, transparent business scheme."
But Infiniti's repositioning is a throwback to the mid-2000s when its lineup included reworked Nissans loaded with upmarket flourishes. The automaker later dropped that strategy in favor of creating unique Infiniti products.
However, the new plan is also analogous to the strategy of Infiniti's closest competitor — Honda Motor Co.'s Acura brand, which scores niche success in the U.S. by rolling out sibling nameplates of the mass-market Honda brand that have a unique design and more premium features.
But reviving Infiniti, especially as an upmarket Nissan, won't be easy because of its tiny presence and drooping brand image, said Michelle Krebs, executive analyst at
Autotrader.
"The brand is kind of damaged right now because the sales are dreadful," Krebs said. "How do you maintain a dealer base with that? They have a tough road ahead to pull this off."
Last year, Infiniti's sales in the U.S. fell 21 percent in an overall market down just 1.2 percent.
Infiniti's rework is a repudiation of the upmarket gambit to share engineering with Mercedes-Benz.
That strategy, which delivered the short-lived Q30 and QX30, fizzled because the price-sensitive Infiniti brand couldn't absorb the higher cost structure of the Daimler-designed models.
The partnership was largely sustained by the personal rapport of the men leading both companies, Ghosn at the Renault-Nissan alliance and Zetsche at Daimler. But both of those executives are gone from the industry scene, and new projects have been mostly dormant.
Last week, Jean-Dominique Senard, Ghosn's successor as Renault chairman and alliance figurehead, hinted that deals with Daimler are far from dead.
"In terms of the atmosphere of this alliance, it is strong, and it's getting stronger. And I deeply hope that we will be able to give some news about this alliance in the coming weeks," Senard said of Daimler. "It's a little early, but in the coming weeks. And it's a very, very positive move."
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