With the Europe-wide launch of Infiniti no longer an ‘if’ but a ‘when’, Nissan seems determined to make its luxury line a truly global brand. Infiniti, even more than Honda’s Acura line, has been a true ‘sleeper’ but in recent months, its most-recently launched products have helped it become America’s biggest comeback kid: sales up more than 36% so far this year. And almost all of that progress from cars – an all-new truck range in 2004 promises far, far more. But how to translate a carefully crafted comeback into a high-impact début elsewhere? Can a name that today means nothing to Europeans really succeed in the world’s oldest and most competitive luxury vehicle market? Yes, argues Glenn Brooks, provided it gets the product exactly right.
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An interesting thing happened to Lexus sales in Britain (its largest European market) this summer: the long, slow collapse went into a dramatic reversal, all thanks to one new model, the RX300. Lexus’ July UK sales were up 31% year on year, though the picture across Europe as a whole was still alarming in the first six months of 2003: sales fell by more than 20%, the entire five-model line-up ending the January-June period less than 100 units ahead of BMW’s worst-seller, the 7 Series. Nissan Europe is no doubt looking long and hard at those numbers as it plans an entry strategy for Infiniti – the clues for success and failure are glaringly obvious in equal measure in Lexus’ recent experiences.
So just what might Misters Ghosn and Pelata be thinking as they study ways of introducing an unknown brand and placing it head to head with BMW, Mercedes-Benz and Audi in their heartland? Obviously, much of the current Infiniti model range, heavy with big six- and eight-cylinder engines powering large saloons is entirely unsuitable, as Lexus’ experience shows.
No, what is needed in Europe, as Toyota’s aspirational brand has finally realised, is beautifully elegant or arrestingly handsome styling to accompany best-in-class reliability and build quality. That’s not rocket science, of course, but it IS extraordinary what can happen to a brand’s image when it launches just one perfectly proportioned (Audi TT) or polarising (BMW 5 Series) car. It is interesting to note that the RX300 has outsold both BMW’s X5 and Mercedes’ M-class petrol-engined models so far this year in Britain, the brand’s largest European market. By common consensus, the RX is a distinctive-looking car backed by clever advertising. Just think what Lexus could do if it had a rival for the big-selling X5 3.0d, ML270 CDI and Volvo XC90 D5 versions.
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The Infiniti FX45 |
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Hands up if you are surprised by any of the following: according to statistics collected by Acea, 38.9 percent of new vehicles last year in western Europe had diesel engines. It’s rising, too: to 42.3 percent in the first four months this year, the latest period for which data is available. Lexus does little business in France and how could it? There, over 67% of new vehicles sold in the first four months of 2003 had compression-ignition engines under the bonnet. The other big rich markets, such as Italy, Germany and the UK have all got diesel sectors higher than 25%. And rising. That’s a lot of buyers to be ignoring, month after month.
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By GlobalDataSo much for the ongoing mistakes of Lexus and the obvious advantage for arch-rival Infiniti if its own launch models come with the right engines. Even more important than offering your customers a low-tax diesel fuel option, of course, is what the sheet metal and interior of your vehicles look like, another area where Lexus has struggled to give buyers a reason to visit its showrooms. If pressed, could you really visualise the styling differences between the latest LS 430 and the second generation shape of 1994? I’ll be kind and not bring the 1989 original into it, though I could, of course. While Lexus continues to mistake the endless repetition of a now 14 year old silhouette (itself heavily influenced by 1980s Mercedes-Benzes) for the perceived ‘heritage’ of its current line-up, Infiniti is probably planning to sell something completely different to Europeans. If the latter were planning to start selling cars and trucks in Europe tomorrow, which models from the US range would work? The answer to the €64 million question is, drum roll… none of them. Nissan would be the first to admit that. Tomorrow, though, will be a different story.
Nissan Europe has made no attempt to hide the Muranos parked on the streets surrounding its headquarters on the outskirts of Paris in recent months. There must be a reason why this potentially big-selling car is not already on sale in Europe. Could it, perhaps, be reserved as an RX300 rival for Infiniti’s launch in 2005? By then, it will be due for its first facelift and Nissan ought to have developed or sourced a suitable diesel power plant. So there’s the €35,000 entry-level vehicle and the one to lure those who think the BMW X3 could look a little more special into the showrooms.
Infiniti will also need a very strong supporting cast of sporty and luxurious models. But can it make the public think of its cars as Japanese BMWs? Over time, yes. In the USA, this is exactly the image that the brand is starting to earn for itself after several wrong turns. The Primera-based G20 died a year ago while the old Maxima-based I35 still sells well but is on run-out and will be replaced by a rear-driver. Front-wheel drive is no longer on the Infiniti menu: every new model will have rear- and/or four-wheel drive. Lexus, of course, has never offered Europeans a front-wheel drive model. This has been its somewhat half-hearted attempt to have potential buyers think of it as ‘just like BMW and Mercedes’ but its cars have always had something missing: a strong image. A big Toyota is what people think, if they think anything at all. Nissan will not make that mistake with its luxury brand.
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The Infiniti G35 Coupe |
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Today, Infiniti is outsold in the USA by (in ascending order), Lincoln, Acura, Cadillac, Mercedes-Benz, BMW and Lexus. But look more closely at the numbers and you’ll discover that its best-selling car range (G35) now outsells Lexus’ traditional big-volume sedan, the ES series. Consider also, that Infiniti’s one and only truck (with quite a few more on the way) is fast closing on all its rivals’ best-sellers. The FX has earned rave reviews from the press for its car-like handling, avant garde looks and snazzy interior – quite a contrast to the now discontinued QX4. Imagine the profits that the future Infiniti spin-offs of Nissan’s full-sized Titan and Pathfinder Armada trucks are going to generate.
It should also be pointed out that although Lexus currently outsells Infiniti more than two to one in the USA, the gap continues to close month by month, even as Lexus enjoys record sales itself. One reason? Infinitis are, increasingly, exclusive to the division. With the exception of the GX470 (a Sequoia with a different body), all Lexuses are rebadged Toyotas. Is that how you define an exclusive brand? Interestingly enough, Infiniti’s biggest selling cars (G35) and trucks (FX3/45) have no Nissan Division equivalents. Another factor that now distinguishes Infiniti from Lexus: its biggest sellers are cars. The G35 Series may be little more than a rebadged Japanese Skyline but there is no Nissan version of the FX3/45 in Japan, while Infiniti had the G35 Sports Coupe long before it became a Skyline Coupe in Japan. Clearly, the bosses in Tokyo are rebuilding their luxury brand very carefully and preparing it for comparison with any rival, anywhere.
Even the slow-selling M45, which at first glance looks little more than a Nissan Gloria that’s been shipped over from Japan, has in fact been given a 4.5 litre V8 engine for its trip across the Pacific, something no Tokyo taxi version has ever had. It’s not selling terribly well but that’s beside the point: the car was old when Infiniti got hold of it and the styling does not exactly suggest ‘muscle car’ despite what the advertisements say. True, it does have a sonorous 340 hp V8 but overall it’s little more than a ‘place holder’ for the bold-looking 5 Series challenger that is now only months away from replacing it.
You can also bet your bottom yen that the M45 successor has been developed with Europeans in mind. Why not a V8 turbodiesel derivative? If Infiniti can launch just such a version in Europe, it will grab itself a high-publicity niche that no one else has filled, despite the somewhat less than sporting Mercedes E400 CDI getting accidentally close. Then again, perhaps BMW is aware of the opportunity but is frightened of what a 540d might do to 7 Series sales. Whatever the case, there is an opportunity there and a newcomer could shake the market up quite easily.
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The Infiniti G35 Sedan |
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A great model range is one thing, making it pay is another. The real money in the automotive business is, of course, in light trucks. But how to translate this for Europe? Someone already has and Infiniti would do well to follow the example. If Porsche can get away with using the T5 Volkswagen Transporter/Eurovan (let’s not mention Bentley’s Continental GT) as the basis for a €100,000+ SUV, then no-one can dare to criticise Nissan for using the bread and butter Skyline chassis for its increasingly successful FX35 and 45. The best derivatives off this platform are also still to come: if the forthcoming Nissan GT-R does, as is rumoured, inspire a rebodied Infiniti version for Europe and NAFTA with a rumoured 400 hp V8, then those plans to make the name mean ‘Japanese BMW’ start to look believable. Add in a four-door M45 replacement, along with a hyper M5 rival off the same platform and you suddenly have what looks suspiciously like a muscle car sub-brand.
And what will Lexus have? We’ll soon find out but indications suggest that the new GS will stick with its formula of odd looks (will big red circular fog lights continue as an incongruous highlight of Lexus rear styling?) and so-so handling. There might be a 4.7 litre V8 but can you really see Toyota building and aggressively marketing a tautly-sprung Lexus GS470 to rival the BMW M5? Exactly. And not to put too fine a point on it, when was the last time a European luxury car maker released a truly stunning design? Think Audi A8, Volkswagen Phaeton, Jaguar XJ, Mercedes E-class and BMW 5 Series (old and new): each looks as though it had every ounce of character hacked off it by a committee or in one case, somebody forgot to ask the question: ‘yes, it’s striking but is it attractive?’ Why not a Japanese newcomer to break the beauty drought?
So let’s fast forward to the end of this decade. Incomes all across Europe have continued to rise, particularly in the East, Infiniti has a full line of vehicles that sells extremely well throughout the expanded EU and which have themselves helped move Nissan’s pricing up into Volkswagen and Toyota premium levels. Meanwhile, Infiniti is recognised as an equal to Lexus in the US and is expected to overtake its old rival for luxury leadership any time now, Cadillac and Lincoln sadly reduced to bit part players with the collapse of the now distant large SUV boom and their failure to develop economical, recall-proof, good looking, great-handling cars.
Let’s also dare to imagine something else. The French public now accept that Nissan was handed control of Renault when the State sold down its holding to find the cash to bail out Groupe Bull in August 2003. The management of Nissan discovered to their delight that their 15% stake in Renault S.A. made them, at first, the equal majority owner and then, as they bought a little more and the French government continued to sell down to a zero holding, Nissan became the largest holder. What a comeback for the company that had begged Renault for help all those years ago. Renault’s own luxury models were, of course, not allowed to challenge Infiniti’s pricier line-up but then the Espace V and range of lightweight sports cars had carved themselves their own moderate volume/high profitability niche. Oh, plus the handful of V8 and V12-engined built-in-America Renault Presidents (rebadged Infinitis, naturally) for the ceremonial needs of France’s head of state. A fantasy? Of course. Just like the idea of a Japanese car to rival a Mercedes S-class back in 1989.
