Bloomberg News

Nissan’s Infiniti Seeks to Turn Profitable With China Exp

February 18, 2013

Nissan Motor Co.’s luxury Infiniti unit said it’s targeting to turn profitable in the next three- to-four years as it begins production in China and introduces entry-level vehicles to attract customers.

Infiniti, which last year relocated its headquarters to Hong Kong from Japan, plans to start building cars in China in the third quarter of 2014 and for global sales this year to gain at least 10 percent to about 200,000 units, President Johan de Nysschen said in an interview today.

“We really have been a U.S.-centric brand,” de Nysschen said on Bloomberg TV’s “Asia Edge” show with Susan Li and Rishaad Salamat in Hong Kong. “The future has got to be for us to look at China.”

Nissan Chief Executive Officer Carlos Ghosn hired de Nysschen, formerly Audi AG’s U.S. head, to revamp Infiniti as the brand seeks a bigger share of China’s growing luxury auto market and boost global sales of the brand to 500,000 units a year. The Yokohama, Japan-based automaker is looking to boost Infiniti’s position against Bayerische Motoren Werke AG, Daimler AG’s Mercedes-Benz, Volkswagen AG’s Audi and Toyota Motor Corp.’s Lexus.

Global sales last year were below 200,000 units, de Nysschen said last month in Detroit. Infiniti sold 12,551 vehicles in China in 2012, according to researcher LMC Automotive.

Nissan moved Infiniti’s global headquarters to Hong Kong in May 2012. The marque in December said it would revamp model names this year -- Q for cars, QX for light trucks -- as part of a push to expand in the U.S. and China.

It unveiled the Q50 sports car at the North American International Auto Show in Detroit last month, in its first shot against BMW, Audi and Mercedes-Benz.

China Delay

In China, Infiniti delayed introducing some models and cut back on marketing and promotion after consumer sentiment turned against Japanese brands last year as a territorial dispute escalated between the two countries over a group of uninhabited islands in the East China Sea.

“The very intense emotion around the issue seems to have subsided somewhat, and we find that business is returning to a more normal state,” de Nysschen said. Still, tensions between the two countries remain a “strong undercurrent” to doing business, he said.

Infiniti is incorporated as a separate legal entity with its own corporate culture and brand philosophy, though it’s a wholly owned unit of Nissan, de Nysschen said.

Growth Market

Infiniti is confident of increasing sales this year in China by at least 10 percent and plans to add 20 dealerships in 2013 to the 60 in operation as of the end of last year, he said last month.

Annual sales in China, the biggest growth market for Infiniti, should reach 200,000 units by the end of the decade, de Nysschen said at the time. The brand had not previously released sales figures for China, according to its country head Allen Lyu.

The marque is looking into introducing lower-priced, entry- level models to attract younger buyers as baby boomers decline in numbers, de Nysschen said today.

On the yen, the weakening of the currency has brought a “sense of relief” as most of Infiniti’s production is in Japan, with only one model made outside of the country, he said.

To contact Bloomberg News staff for this story: Alexandra Ho in Shanghai at aho113@bloomberg.net; Rishaad Salamat in London at rishaad@bloomberg.net; Susan Li in Hong Kong at sli31@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net


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