Infiniti seeks pricing parity with rivals
06-09-12, 11:09 AM
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Infiniti seeks pricing parity with rivals
Good luck with this Infiniti....
http://www.autonews.com/apps/pbcs.dl...305289962/1280
Infiniti seeks pricing parity with rivals
Brand wants its transactions on par with BMW, Mercedes, Audi by 2016
Unveiling a bold new ambition for Infiniti, global boss Andy Palmer said the luxury brand wants to achieve transaction-price parity with its three major German rivals by 2016.
Commanding prices on par with BMW, Mercedes or Audi would be a milestone for a Japan luxury brand. Infiniti, Lexus and Acura have all aspired to that sticker strata but have failed to convince buyers that their less established brands are worth it.
As Infiniti opened a global headquarters in Hong Kong on May 22, Palmer, Nissan Motor Co.'s executive vice president in charge of global product planning and the Infiniti business, laid out a two-pronged approach to building the brand:
1. Distance Infiniti from the mass-market Nissan brand.
2. Poach an experienced brand chief to guide the way.
Infiniti has chosen the new general manager, who will be based in Hong Kong. Nissan has not publicly identified the person, but he comes from outside Nissan and has extensive experience with luxury brands, Palmer said.
'Significant experience'
"We decided to go for external talent with a very, very, very good track record," Palmer told Automotive News, adding that Nissan plans to announce the hire soon. "He has significant experience in the luxury field. When we go out and buy talent, we're going to make sure it's the best."
The new manager will fill a position vacated by Toru Saito, who was reassigned in April to become COO of Autech Japan, a Nissan-affiliated vehicle customizer.
The new Hong Kong headquarters is a key element in setting Infiniti apart.
"Infiniti needs to be given oxygen from the Nissan brand," Palmer said, explaining the rationale behind setting up Infiniti's global headquarters away from Nissan Motor Co.'s headquarters in Yokohama, Japan.
"If you plant two trees too close together, only one of the trees will survive because one draws water and energy from the other," Palmer said.
Nissan has big plans for Infiniti under its current midterm business plan which runs through March 2017. The company aims for global Infiniti sales of 500,000 units by then, compared with about 150,000 last year. That should give it a 10 percent share of the global luxury car market, Nissan says. And Infiniti plans to expand its lineup to at least 10 vehicles, from eight today.
Palmer said Infiniti will achieve record worldwide sales of 200,000 units this year.
Pricing power
Improving pricing power is the top priority, Palmer said.
"The absolute requirement is that transaction prices should be equal to the German Big 3. That's more of a priority for us than the 500,000," Palmer said.
Palmer regularly tracks transaction prices of rival brands, adjusted for the amount of features and accessories loaded onto the cars. Infiniti is on par with Lexus, and both Japanese brands are on Audi's heels, Palmer said. BMW and Mercedes are further ahead.
Infiniti's relation to Nissan, Palmer said, needs to be more in line with the Audi-VW relationship than the Cadillac-GM one.
Infiniti will get help closing the pricing gaps in certain markets, such as China and the United States, where BMW and Mercedes are engaged in price wars, he predicted.
Nissan's lineup will grow to 10 vehicles, including the JX crossover that just went on sale in the United States, an entry car based on the Etherea concept and the LE electric vehicle, which is based on the Nissan Leaf battery-powered car.
Palmer said the LE, which goes on sale in 2014, could account for 10 percent of Infiniti's global sales in 2016, thanks to higher consideration from wealthier customers.
"When you look at purchases of Leaf, almost all our buyers are high-income individuals," Palmer said. "The electric vehicle fits very well into that income bracket."
Two more cars planned for production in China will be derivatives of existing models. It unveiled a stretched version of the Infiniti M sedan designed for Chinese customers at the Beijing Auto Show last month.
200,000 N.A. units
Looking ahead, North America should deliver sales of 200,000 units in 2016 -- or about 40 percent of Infiniti's annualized target of half a million vehicles, Palmer said. That would be roughly double last year's tally of 98,461, when sales fell 5 percent. Through April, Infiniti's 2012 sales are down 4 percent to 33,349.
The biggest sales increase, on a percentage basis, will come in China. Infiniti expects sales there to climb to around 100,000 in 2016, from just under 20,000 last year.
Russia and the Middle East are expected to be other big growth markets.
"Establishing our headquarters in Hong Kong, the gateway to China, is an acknowledgment of the center of gravity in luxury vehicle sales," Palmer said. He said Infiniti dealerships in China will increase to more than 100 over the next year, from 25 last year.
Nissan's deliveries of Infiniti vehicles in China climbed almost 40 percent to 19,000 units last year, making it the luxury brand's second-largest market after the United States, where two-thirds of Infiniti cars were sold last year.
"What they are trying to do in China is what Toyota's doing in the United States," said Kota Yuzawa, an analyst with Goldman Sachs Group Inc. "It's very much from scratch. Lexus 20 years ago was also from scratch."
Sales of premium cars have "considerable" room to grow as they only account for about 5 percent of vehicle sales in China, compared with 10 percent in the U.S. and 16 percent in Europe, Yuzawa said in an April 20 report.
Infiniti sales may reach 300,000 in the country by March 2021, according to Yuzawa's report.
Nissan said last month it will begin manufacturing two Infiniti models in China starting in 2014. Nissan CEO Carlos Ghosn told reporters in Hong Kong that details, including the location of Infiniti's China plant, will be announced by the end of the year.
Infiniti vehicles are sold in 46 countries and regions, and the company planning to expand that to 70 markets by 2016. Ghosn said that Infiniti this year will enter several new markets, including Australia, Mexico and Brazil.
Brand wants its transactions on par with BMW, Mercedes, Audi by 2016
Unveiling a bold new ambition for Infiniti, global boss Andy Palmer said the luxury brand wants to achieve transaction-price parity with its three major German rivals by 2016.
Commanding prices on par with BMW, Mercedes or Audi would be a milestone for a Japan luxury brand. Infiniti, Lexus and Acura have all aspired to that sticker strata but have failed to convince buyers that their less established brands are worth it.
As Infiniti opened a global headquarters in Hong Kong on May 22, Palmer, Nissan Motor Co.'s executive vice president in charge of global product planning and the Infiniti business, laid out a two-pronged approach to building the brand:
1. Distance Infiniti from the mass-market Nissan brand.
2. Poach an experienced brand chief to guide the way.
Infiniti has chosen the new general manager, who will be based in Hong Kong. Nissan has not publicly identified the person, but he comes from outside Nissan and has extensive experience with luxury brands, Palmer said.
'Significant experience'
"We decided to go for external talent with a very, very, very good track record," Palmer told Automotive News, adding that Nissan plans to announce the hire soon. "He has significant experience in the luxury field. When we go out and buy talent, we're going to make sure it's the best."
The new manager will fill a position vacated by Toru Saito, who was reassigned in April to become COO of Autech Japan, a Nissan-affiliated vehicle customizer.
The new Hong Kong headquarters is a key element in setting Infiniti apart.
"Infiniti needs to be given oxygen from the Nissan brand," Palmer said, explaining the rationale behind setting up Infiniti's global headquarters away from Nissan Motor Co.'s headquarters in Yokohama, Japan.
"If you plant two trees too close together, only one of the trees will survive because one draws water and energy from the other," Palmer said.
Nissan has big plans for Infiniti under its current midterm business plan which runs through March 2017. The company aims for global Infiniti sales of 500,000 units by then, compared with about 150,000 last year. That should give it a 10 percent share of the global luxury car market, Nissan says. And Infiniti plans to expand its lineup to at least 10 vehicles, from eight today.
Palmer said Infiniti will achieve record worldwide sales of 200,000 units this year.
Pricing power
Improving pricing power is the top priority, Palmer said.
"The absolute requirement is that transaction prices should be equal to the German Big 3. That's more of a priority for us than the 500,000," Palmer said.
Palmer regularly tracks transaction prices of rival brands, adjusted for the amount of features and accessories loaded onto the cars. Infiniti is on par with Lexus, and both Japanese brands are on Audi's heels, Palmer said. BMW and Mercedes are further ahead.
Infiniti's relation to Nissan, Palmer said, needs to be more in line with the Audi-VW relationship than the Cadillac-GM one.
Infiniti will get help closing the pricing gaps in certain markets, such as China and the United States, where BMW and Mercedes are engaged in price wars, he predicted.
Nissan's lineup will grow to 10 vehicles, including the JX crossover that just went on sale in the United States, an entry car based on the Etherea concept and the LE electric vehicle, which is based on the Nissan Leaf battery-powered car.
Palmer said the LE, which goes on sale in 2014, could account for 10 percent of Infiniti's global sales in 2016, thanks to higher consideration from wealthier customers.
"When you look at purchases of Leaf, almost all our buyers are high-income individuals," Palmer said. "The electric vehicle fits very well into that income bracket."
Two more cars planned for production in China will be derivatives of existing models. It unveiled a stretched version of the Infiniti M sedan designed for Chinese customers at the Beijing Auto Show last month.
200,000 N.A. units
Looking ahead, North America should deliver sales of 200,000 units in 2016 -- or about 40 percent of Infiniti's annualized target of half a million vehicles, Palmer said. That would be roughly double last year's tally of 98,461, when sales fell 5 percent. Through April, Infiniti's 2012 sales are down 4 percent to 33,349.
The biggest sales increase, on a percentage basis, will come in China. Infiniti expects sales there to climb to around 100,000 in 2016, from just under 20,000 last year.
Russia and the Middle East are expected to be other big growth markets.
"Establishing our headquarters in Hong Kong, the gateway to China, is an acknowledgment of the center of gravity in luxury vehicle sales," Palmer said. He said Infiniti dealerships in China will increase to more than 100 over the next year, from 25 last year.
Nissan's deliveries of Infiniti vehicles in China climbed almost 40 percent to 19,000 units last year, making it the luxury brand's second-largest market after the United States, where two-thirds of Infiniti cars were sold last year.
"What they are trying to do in China is what Toyota's doing in the United States," said Kota Yuzawa, an analyst with Goldman Sachs Group Inc. "It's very much from scratch. Lexus 20 years ago was also from scratch."
Sales of premium cars have "considerable" room to grow as they only account for about 5 percent of vehicle sales in China, compared with 10 percent in the U.S. and 16 percent in Europe, Yuzawa said in an April 20 report.
Infiniti sales may reach 300,000 in the country by March 2021, according to Yuzawa's report.
Nissan said last month it will begin manufacturing two Infiniti models in China starting in 2014. Nissan CEO Carlos Ghosn told reporters in Hong Kong that details, including the location of Infiniti's China plant, will be announced by the end of the year.
Infiniti vehicles are sold in 46 countries and regions, and the company planning to expand that to 70 markets by 2016. Ghosn said that Infiniti this year will enter several new markets, including Australia, Mexico and Brazil.
06-09-12, 01:04 PM
#5
Lexus Fanatic
Infiniti seeks pricing parity with rivals
Brand wants its transactions on par with BMW, Mercedes, Audi by 2016
Brand wants its transactions on par with BMW, Mercedes, Audi by 2016
Despite the continuing lack of a true Lexus LS460-style flagship, though, I will have to give Infiniti some credit in the last few years for some excellent new products.....the new JX is a great example.
But, with the JX being one of the few exceptions, in general, Infiniti is going to have to work a little more on ride-comfort. Its (admittedly) sport-oriented products have been criticized by even some in the auto-press and among enthusiasts as having jarring rides.
06-09-12, 01:16 PM
#6
Guest
Posts: n/a
Mike the JX is average at best an has gotten pretty average reviews. Its
Not a great vehicle at all but has a good price and size with 7 seats.
They seem to be all over the place with no clear focus. Good luck to them cause Lexus needs infintiit to do better help upgrade the image of Japanese luxury cars. Lexus can't continue to do it alone. This article and people try to lump the 3 Japanese brands together but you can't , it's like like how BMW/Benz//Audi are all seen as equals. Lexus by far leads Asia from a luxury perspective.
We will see what their new chief can do since he left Audi for Infiniti.
Not a great vehicle at all but has a good price and size with 7 seats.
They seem to be all over the place with no clear focus. Good luck to them cause Lexus needs infintiit to do better help upgrade the image of Japanese luxury cars. Lexus can't continue to do it alone. This article and people try to lump the 3 Japanese brands together but you can't , it's like like how BMW/Benz//Audi are all seen as equals. Lexus by far leads Asia from a luxury perspective.
We will see what their new chief can do since he left Audi for Infiniti.
Last edited by LexFather; 06-09-12 at 01:21 PM.
06-09-12, 05:13 PM
#7
Lexus Test Driver
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Expanding from 8 vehicles to 10, but one of those is the JX which is meh.
How bout a full-fledged Infiniti M3/C63/RS4/ISF fighter rather than this lame IPL stuff? How bout an "M" M? How bout a Q flagship that will actually sell? I'm puzzled why Infiniti could never actually sell any Q's. I see they don't even offer it anymore. Have never really warmed up to Infiniti styling either. They think they need more space and breathing room from the Nissan products? HUH?? I don't see how they could be much further apart... The Nissans are all FWD based and have very different styling, with the Infinitis being exclusively RWD based almost. If "more space" from the Nissan products is what they think they need this this is doomed to fail I think, because that's not it. The electric vehicle is a niche market still so they're not gonna get to 500k sales annually from that, either.
To get to pricing parity with the best of the Germans, Infiniti needs to start offering vehicles that are arguably better than the competing German vehicles. Right now they're making very good copies of German cars and that's not good enough. Offer me more, and I'll pay more.
How bout a full-fledged Infiniti M3/C63/RS4/ISF fighter rather than this lame IPL stuff? How bout an "M" M? How bout a Q flagship that will actually sell? I'm puzzled why Infiniti could never actually sell any Q's. I see they don't even offer it anymore. Have never really warmed up to Infiniti styling either. They think they need more space and breathing room from the Nissan products? HUH?? I don't see how they could be much further apart... The Nissans are all FWD based and have very different styling, with the Infinitis being exclusively RWD based almost. If "more space" from the Nissan products is what they think they need this this is doomed to fail I think, because that's not it. The electric vehicle is a niche market still so they're not gonna get to 500k sales annually from that, either.
To get to pricing parity with the best of the Germans, Infiniti needs to start offering vehicles that are arguably better than the competing German vehicles. Right now they're making very good copies of German cars and that's not good enough. Offer me more, and I'll pay more.
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06-09-12, 11:43 PM
#8
Mike the JX is average at best an has gotten pretty average reviews. Its
Not a great vehicle at all but has a good price and size with 7 seats.
They seem to be all over the place with no clear focus. Good luck to them cause Lexus needs infintiit to do better help upgrade the image of Japanese luxury cars. Lexus can't continue to do it alone. This article and people try to lump the 3 Japanese brands together but you can't , it's like like how BMW/Benz//Audi are all seen as equals. Lexus by far leads Asia from a luxury perspective.
We will see what their new chief can do since he left Audi for Infiniti.
Not a great vehicle at all but has a good price and size with 7 seats.
They seem to be all over the place with no clear focus. Good luck to them cause Lexus needs infintiit to do better help upgrade the image of Japanese luxury cars. Lexus can't continue to do it alone. This article and people try to lump the 3 Japanese brands together but you can't , it's like like how BMW/Benz//Audi are all seen as equals. Lexus by far leads Asia from a luxury perspective.
We will see what their new chief can do since he left Audi for Infiniti.
It looks like the 3 Japanese Lux brands are at different levels.
1. Lexus
2. infiniti
3. Acura
06-11-12, 03:27 AM
#10
Lexus Champion
They're the middleman in this case.
06-11-12, 09:03 AM
#11
Only way for them to increase sales by 3x within 3 years (very small amount of time) is to introduce several cheaper entry level models.
What they are saying here is that new G and M will be priced similar to Germans and that they want to sell 3x more of them.
06-11-12, 10:32 AM
#12
Mike the JX is average at best an has gotten pretty average reviews. Its
Not a great vehicle at all but has a good price and size with 7 seats.
They seem to be all over the place with no clear focus. Good luck to them cause Lexus needs infintiit to do better help upgrade the image of Japanese luxury cars. Lexus can't continue to do it alone. This article and people try to lump the 3 Japanese brands together but you can't , it's like like how BMW/Benz//Audi are all seen as equals. Lexus by far leads Asia from a luxury perspective.
We will see what their new chief can do since he left Audi for Infiniti.
Not a great vehicle at all but has a good price and size with 7 seats.
They seem to be all over the place with no clear focus. Good luck to them cause Lexus needs infintiit to do better help upgrade the image of Japanese luxury cars. Lexus can't continue to do it alone. This article and people try to lump the 3 Japanese brands together but you can't , it's like like how BMW/Benz//Audi are all seen as equals. Lexus by far leads Asia from a luxury perspective.
We will see what their new chief can do since he left Audi for Infiniti.
06-11-12, 11:00 AM
#13
Lexus Fanatic
They seem to be all over the place with no clear focus. Good luck to them cause Lexus needs infiniti to do better.
Lexus can't continue to do it alone.
Lexus can't continue to do it alone.
We will see what their new chief can do since he left Audi for Infiniti.
Last edited by mmarshall; 06-12-12 at 09:01 AM.
06-11-12, 04:02 PM
#14
Mike the JX is average at best an has gotten pretty average reviews. Its
Not a great vehicle at all but has a good price and size with 7 seats.
They seem to be all over the place with no clear focus. Good luck to them cause Lexus needs infintiit to do better help upgrade the image of Japanese luxury cars. Lexus can't continue to do it alone. This article and people try to lump the 3 Japanese brands together but you can't , it's like like how BMW/Benz//Audi are all seen as equals. Lexus by far leads Asia from a luxury perspective.
We will see what their new chief can do since he left Audi for Infiniti.
Not a great vehicle at all but has a good price and size with 7 seats.
They seem to be all over the place with no clear focus. Good luck to them cause Lexus needs infintiit to do better help upgrade the image of Japanese luxury cars. Lexus can't continue to do it alone. This article and people try to lump the 3 Japanese brands together but you can't , it's like like how BMW/Benz//Audi are all seen as equals. Lexus by far leads Asia from a luxury perspective.
We will see what their new chief can do since he left Audi for Infiniti.
06-11-12, 06:58 PM
#15
Guest
Posts: n/a
Eh, there are reasons to dislike the JX (CVT?), but all in all it's a solid car, looks OK to Good, but what's most important is that it has no competition within it's price range. (We're talking only about Luxury brands, here). Hell, fully loaded it's cheaper than a GX is at base!
