GS69

Palmer: Nissan Considered Killing Infiniti

In nearly 24 years of existence, the Infiniti luxury brand has been less than a stellar performer.

Parent Nissan had a volume-rules mentality when it came to Infiniti sales, says Nissan Executive Vice President Andy Palmer, and little attention was paid to developing the type of products that have made the German brands so desirable.

Results were predictably mediocre, and Nissan CEO Carlos Ghosn considered killing the brand.

“Very frankly, very candidly, we don’t need Infiniti, we just don’t need that brand,” Palmer tells WardsAuto in an interview at the 2013 North American International Auto Show here. “Mr. Ghosn challenged me and said, ‘We don’t have to do Infiniti, you can cancel it if you want.’”

But with luxury brands typically accounting for half the profits of auto makers that have 1, Palmer couldn’t help but see a future for Infiniti – if Nissan would commit to doing things “properly.”

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

Many luxury brands owned by volume manufacturers fall into that same trap, he says, except one: Audi.

Audi has escaped any negative connotation from its association with midmarket Volkswagen by maintaining some autonomy, Palmer says.

Keeping some operational distance while still part of VW’s enormous corporate structure has allowed Audi “to create a series of professionals that understand the premium market in a very premium way.”

For that reason, Nissan identified Johan de Nysschen, the former chief of Audi in the U.S., as an ideal candidate to head Infiniti.

During de Nysschen’s seven years atop Audi’s American arm, sales rose from 77,917 vehicles in 2004 to 117,567 in 2011, and the brand began to be breathe the same rarefied air as BMW and Mercedes-Benz.

Nissan finally got its man last summer after years of pursuit, naming de Nysschen senior vice president of the brand worldwide, but not before making some changes.

Prior to de Nysschen’s arrival, “we said, ‘I want the best guy at Audi,’” Palmer says. “(But) you’re not going to get the best guy at Audi unless you’ve got some reason for him to come.”

Palmer rattles off the list of changes made over the past 3 years to lure the Audi executive to Infiniti, including the signing of a joint-venture pact with Daimler that will see Mercedes engines under the hood of the new Q50 sport sedan; relocation of Infiniti offices from Japan to Hong Kong and the lucrative Chinese market; and green-lighting the 3-row JX cross/utility vehicle and G37-replacement Q50.

Now with the proper “assets” to right Infiniti’s path, Palmer says he has a commitment from de Nysschen to improve Infiniti much the same way he did Audi.

1 of the 1st things de Nysschen did after joining Infiniti was to back away from Nissan’s previously announced goal of selling 500,000 units globally by 2016, pushing the target back to 2017. Infiniti’s global sales tallied roughly 200,000 last year.

Palmer says de Nysschen told him: “I need some time; I don’t need the volume pressure. 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 the volume that comes.”

In an interview with WardsAuto here, de Nysschen says, “If you hold people’s feet to the fire, just for volume, you encourage the wrong kind of behaviors,” referring to discounting and incentivizing at retail.

Selling 500,000 units in “2017 or 2020 is less important than that we develop the brand metrics which entrench Infiniti as an unquestioned member of the club of premium automotive brands,” de Nysschen says. “That is our mission.”

Infiniti will renew all existing models in its lineup, as well as add 4 new ones over the next 4 years.

The brand already has confirmed a production compact sedan, based on the Etherea concept, is due in 2015 and a production version of the LE electric-car concept from last year’s New York auto show will arrive in 2014.

De Nysschen says a production version of the Essence concept supercar is a possibility, as is a larger-than-M model, although it’s unclear in what segment that car would be positioned.

“We don’t intend and try and recreate (a) Mercedes S-Class or BMW 7-Series or Audi A8,” he says. “That segment indeed is stagnating. No, we plan to produce a very emotional car.”

The future model would be “very progressive, perhaps even provocative (in) design.” It would be an “aspirational” car, he adds, mixing elements of luxury and performance.

It may be a niche model in cost, but not in appeal.

“I think many people would want it (due to compelling features and design), but it will occupy a premium-price position,” de Nysschen says.

cschweinsberg@wardsauto.com

Joeb427

iTrader: (1)

Even with the big discounts in purchasing and leasing,I've never had much interest in an Infiniti.
An Infiniti dealer is the closest dealer to my home and I see Infiniti models a lot..

mmarshall

Infiniti's problems date back to their earliest days as a manufacturer, and the way they blew the original Q45's design/marketing. Instead of making it a true luxury car like Lexus did with the LS400 (maximum isolation, refinement, quietness, soft-ride), they did essentially a big, V8-powered sports-sedan, with a starker interior than the LS, to rival the BMW 7-series. That's not what the public wanted (BMW already owned that market), and they basically ignored the first Q45, even with its active-suspension (Q45a) option. The 2Gen Q45 was more of a proper luxury-car, with wood paneling, softer underpinnings, and less emphasis on power (a 4.1 V8 instead of a 4.6), but still languished. Then, for the 3Gen model, they tried a compromise on both...a luxury sport-sedan...still didn't sell. The poor designers just couldn't win no matter what they did.

Same with the G20...sales-flop at first, pulled from the U.S. market, then re-introduced in another form, and still a sales-flop. The G35 and G35X, though, and their larger M35/45/56 brothers had much better luck...though, in size, I wouldn't consider the M as a true flagship like the Q45 was.

Infiniti also never had the same kind of luck with SUVs that Lexus did. The big QX56 was ugly, ponderous, and (for several years) poorly-assembled and unreliable. Their other SUVs were either too much like their Nissan brothers (QX4), awkwawdly-styled and overly-stiff-riding and uncomfortable (FX35/45), poorly-designed for space-efficiency like the EX35, or, for whatever reason, just not popular with customers. The jury is till out, though, on the JX35....(arguably, IMO, Infiniti's best SUV to date). So far, it avoids many of the other problems that plagued their former SUVs.

spwolf

I think this is as true as GS almost being killed... for whatever reason they think it sounds better.

Obviously Nissan-Renault needs luxury division... thats where all the profits are.

mmarshall

The way the Nissan Altima has been selling lately (especially in the U.S.), it's got to be bringing in its share of the pie, too.

Hoovey689

iTrader: (16)

I don't know anyone who would consider the M35/45/56, RL/RLX, and MKS a flagship. Simply just gap fillers

84Cressida

I'd say they are killing Infiniti with that idiotic re-branding of their names.

1sWt2GS

iTrader: (6)

dont need infiniti?

g35 and g37 were huge successes to the car enthusiast world. i remember back a few years ago, everyone wanted to get their hands on a g35/g37. now if only they could fix that oil consumption problem!

Aron9000

Agreed, Infiniti would be dead if it weren't for the G35 about 8-10 years ago. Their problem has always been, what does a customer buy once they wear out their G35 or need/desire a different type of vehicle for their changing lifestyle. The FX and EX SUV's are kind of a silly vehicle for utilitarian purposes, they're tight inside, ride harsh, and very polarizing from a style standpoint. The M35 sedan has always been a nice, larger upgrade over the G35, but then again its up against some stiff competition from the Germans and the new Lexus GS.

The new big QX and JX are really nice utility vehicles that I think will sell well for the company. Personally I'd take a larger JX over a Lexus RX right now if I had a family, more seats, more space, about the same price.

Also, IMO they aren't in nearly as bad of shape as Cadillac or Acura in terms of this same problem, what do you buy when you trade in your CTS or TL?

xsh0tya

I think if they make vehicles that are better than the competition, new buyers won't care about past mistakes. The problem is they have to prove this to be true.

ydooby

So in China you have this extended-wheelbase Fuga that you call the Cima (the Q45's JDM name).

LexFather

Egads, well that would have saved us all those arguing all those years. "I told you so" somehow doesn't sum it up enough

I'm getting tired of the talk..getting to be acuraish..just "do it" stop talking.... if they are serious, they will come out with some killer products with each release that are simply BETTER than the competition. I don't think it was any secret that Infiniti could have been canned when it was really struggling so I don't see the report as too damaging.

Now I'm pretty stunned this man has yet to be mentioned as it was HIM not Johan de Nysschen that lit the fire and put the resources into Audi.

Ferdinand Piëch

As chairman of the VW group, he was the one that insisted that VW move upmarket to battle Benz (with very mixed results) and Audi to battle BMW (a huge success). He was the one that wanted Audi to be more bold stylistically and stop being so bland and staid. And clearly it worked. Quite frankly if you worked for Audi in the 2000s, you were at the right place at the right time as Piech made sure it got the resources to succeed. Remember he was the guy that said the Bugatti would make 1,000 hp when they had no idea how much power it would make. I hope people realize that in case this guy doesn't become the savior he is being described as.

If you look at Audi, while the marketing has gotten tons better, well "its the product stupid". People today are lining up to buy Audi's b/c they think they are the best, they think they are aspirational, they think they look good and they don't give a **** about the price. Audi has a damn good product right now in pretty much every class they compete it, arguably best in class.

Audi also has an advantage that Infiniit does not, nor Acura or Lexus. A biased media that will write at will how an Inifniiti is from Nissan, how Acura is from Honda and how Lexus is from Toyota. Every article on every car always brings it up, no matter how far detached the vehicle is. Contrarily even though Audi is from parent company VW, it is rarely ever mentioned. People think its a different company b/c the media isn't reminding them every 10 seconds VW owns them. I like their plans to separate the brands more but will the media allow them too or keep bringing it up?

They got big plans but I think they know good and well the luxury market is pretty much going to be the same going forward in regards to Tiers and prestige, thus they moved their headquarters to China, where there is the most potential growth. The article states they are not chasing sales but Infiniti according to NADA offers the most incentives and has the highest percentage of leases of any luxury brand. In other words the brand and dealers are doing anything to sell the vehicles. They are chasing sales and when you debut a 7 seat SUV with 265hp, you are chasing sales. Not sure why thats a bad thing, they are all in business to chase sales and make money.

They had a good run from 2003-2008 or so trying to show they were a sporting brand from Japan. Well now with the JX and QX not just on their lot but selling well the whole brand position is muddied. I still don't understand how a luxury brand offers 4 SUV lines and 2 car lines. That is quite mind boggling. The competition has gotten fierce and now you have Lexus getting sportier with success, Audi of course, Benz of course, well how would Infiniti stand out? The EX was a ridiculous entry and decision. The current M did not elevate the brand or carry the momentum when it debuted. If you all remember the car was shown at a hotel, not at the LA Auto Show for its debut. Who the hell does that? It has been the QX of all things that has done well for them in an Escalade kind of way. The QX outsells the M amazingly.

Then they just threw out the name of not just the lineup but the G, the car that was their best seller by far. They threw away a near decade of momentum for a Q, which is just a terrible idea. Q is now identified with Audi and sadly Q identified with Infiniti means "discontinued". They really should have kept the names or just renamed them all "G". They also should have debuted the coupe at the same time as the Q50, I don't care what anyone else does. They are not everyone else, they need some excitement in the lineup and the G coupe is the most exciting product they have. Now they will have a Q50 all new with a bunch of rebadged Q vehicles. Egads.

In regards to a flagship, how could they justify it? Their current top line sedan, the M has been a tremendous flop here and everywhere. In the month of December when everyone had a great month, they could not break 1,000 units and it sells worse than the real flagships like the S/7/LS/A8 etc. I also have NO idea why they went after the GS 450h with the M35h as it is one of the smallest niches you could enter. That was a waste of resources, the car is selling around 50-80 units a month. So I have no idea how there could be a business case for a D class flagship that would cost 70-100k for them. Many of us have talked why isn't there a M37/56 coupe? The G coupe has always been well received, I think if they had a M coupe and if they had an Inifiiti based GT-R that would really have showed they are sporty and elevated the brand. They also are missing the boat with a 4 door coupe that the Germans are killing with. Lexus doesn't have one and if Infiniti had one that would make them the lone entry from Asia, a big selling point.

They also have an issue with the GT-R. The most expensive and technologically advanced car should come from Infiniit, not Nissan. It muddies image a ton. I also don't see how a skunkworks team could present a Juke GT-R and not a G or M GT-R or hell an FX GT-R. When the skunkworks team at Lexus did a car, they put the biggest engine into an IS. They didn't take the LS engine and put it in a damn RAV-4.

For Infiniti to be taken seriously, they are going to have to simply present the best product and not by a close margin. They are going to have to somehow present the best product, the best hp, the best MPG, the best interiors, outstanding styling and a cheaper price to really shake things up. This isn't 2003 when Audi was struggling, Lexus wasn't as sporty and you didn't have Hyundai, Kia, Ford, Toyota everyone making really incredible products. Otherwise, yeah they will sell but with the current strategy of super aggressive leases and incentives.

Lexmex

Just before I got my RX300, the Infiniti QX4 was on my watch list, but the RX300 ended up winning out when I realized I could get some support with Toyota south of the border (even without Lexus)...little did I know I'd be doing most of the work. I have found Infiniti's navigation systems are top of the line, but to sell me on anything else they really don't separate themselves much from Nissan. There isn't that wow factor I sometimes get with Lexus. Acura has a similar issue with Honda on some of their lines, but the quality is a bit above Infiniti for me.

mmarshall

The obvious reason (to me at least) that the Infiniti name was not chosen for the U.S.-market GT-R was the almost non-existent sales of the NSX when it was badged as an Acura instead of Honda. Nissan obviously didn't want to repeat that mistake....though that's not to say that GT-R sales, even with the Nissan badge, have been spectacular....they haven't, of course. The GT-R was also hurt by some early-production defects.

Bean

iTrader: (1)

If they're really wanting to revamp the model line and make something that doesn't just have a 'Nissan-push'. I think the new model numbers are a good start, but if they're just re-badging the existing cars; then it's going to be viewed as a branding gimmick and not a true dedication to the brand.

Ghosn is well known for cost-cutting. He got called out on it for the first few generations of Nissan/Infiniti cars so my hopes aren't high with the dedication to Infiniti. I remember the original 350Zs, they were loud on the inside, drove like trucks, and had a terrible plasticky interior. They eventually mostly fixed those problems with the 370z but they moved the cost-cutting to other places, like paint. My 370zs paint job is one of the worst I've ever seen on a production car. Bad orange peel from the factory, an incredibly thin clearcoat and so easy to chip. I've never seen a car chip paint so easily as this car. Everything else on the car is wonderful