With annual sales of less than 10,000, Dongfeng Infiniti was "demoted" and officially announced to be merged into Dongfeng Nissan

Wen | Han Ling, author of the weekly magazine "Finance and Economics"

Editor| Mao Shiyang

On January 5, Dongfeng Motor Co., Ltd. announced that Dongfeng Infiniti will be included in Dongfeng Nissan's management system as an independent business headquarters. This means that Infiniti will become the third brand under Dongfeng Nissan together with Nissan and Venucia brands, which also means that Dongfeng Infiniti will no longer exist as an independent company.

Infiniti is a high-end brand of the Nissan system, and the relationship between the two is like Audi and Volkswagen. However, in the arrangement of joint venture companies in China, Dongfeng Infiniti and Dongfeng Nissan were previously two joint venture automobile companies independent of each other, at the same level, and this time the inclusion of Dongfeng Infiniti into Dongfeng Nissan is equivalent to a disguised "downgrade".

However, due to the fact that Dongfeng Infiniti's sales volume has not been able to open up the situation, due to operating costs, the establishment of a separate joint venture is no longer "cost-effective". In terms of organizational structure, the outside world generally believes that due to the poor sales performance of Infiniti in the Chinese market in recent years, the independent operating costs of the brand are relatively high, and the shareholders of Dongfeng and Nissan have to make this decision in order to reduce operating costs.

In fact, there were already signs of Dongfeng Infiniti's merger into Dongfeng Nissan last year. At the beginning of December 2021, informed sources told the media that Infiniti will move its headquarters back to Guangzhou in January 2022, and the relevant relocation plan is being formulated.

As early as last April, Dongfeng Infiniti had already made organizational restructuring adjustments, splitting the four major business units of the eastern, western, southern and northern districts into 15 districts, with a sales director under the unified responsibility. Officials said that this is to reduce the complexity of communication between the management of the original system and the various regions, and improve the operational efficiency of enterprises.

In response to this integration, Dongfeng Motor officials said that after that, Dongfeng Nissan's three major brands will focus on the high-quality development of the passenger car business, optimize the organizational and cost structure, improve decision-making and operational efficiency, strengthen corporate governance, and provide Chinese consumers with diversified products and technologies.

Dongfeng Infiniti was founded in 2014, and in the past seven years, it has performed in the Chinese market without saying a word.

In the first year of localization in 2014, Dongfeng Infiniti sold 30,000 units, and continued to grow by 33% in 2015, when it was the second fastest growth rate of luxury car brands. After 2016, as other first- and second-tier luxury brands continued to introduce new models, the market competition became more and more intense, and Dongfeng Infiniti was too slow to launch new models, resulting in sales began to decline. From 2016 to 2019, Dongfeng Infiniti sold 17,000, 20,000, 19,000, 10,000 and 8,951 units, respectively. In November 2021, Dongfeng Infiniti's cumulative sales were only 7691 vehicles, down 64.7% year-on-year, with an average monthly sales of less than 700 vehicles throughout the year.

In the context of Infiniti's sluggish sales, the domestic luxury car market has outperformed the market.

According to the data, from January to November 2021, the domestic luxury car market sales were 3.112 million units, an increase of 19.5% year-on-year, of which Cadillac, which belongs to the second-tier luxury brand camp with Infiniti, although there was also a double decline in the last year, but the cumulative sales from January to November also reached about 20,000 vehicles.

Slow product iteration and lack of technical highlights are important reasons for Infiniti's dilemma. Since 2014, in the past eight years, Infiniti's domestic models have only been QX50 and Q50L, and the Q50L listed in 2014 has only been remodeled once. Mao Limin, general manager of Dongfeng Infiniti, once said that it is Shenche who takes a car all over the world in the Chinese market. At present, it seems that Dongfeng Infiniti not only does not have a magic car that can be hit, but complaints about product quality are frequently on the list.

At the March 15 evening party last year, Infiniti was publicly reported by CCTV because of the problem of the gearbox, and on the third-party automobile quality complaint platform, the problems such as Infiniti's "engine oil leakage, all understand, and transmission abnormal noise" appeared many times. According to information published on the website of the State Administration for Market Regulation, In 2020, Nissan (China) Investment Co., Ltd. initiated three Recalls of Infiniti Automobiles, with a total of 56,000 vehicles recalled. However, since Infiniti entered China, its annual sales have not exceeded 50,000 vehicles.

Dongfeng Motor said in the announcement: "In 2022, the new round of product introduction of Infiniti, led by the new QX60 and others, will further meet the needs of Chinese consumers for luxury brands." "The QX60 is Infiniti's third domestic model, and it is highly expected in the Chinese market to change the decline in sales.

In fact, the number of seats in the domestic luxury car market has gradually stabilized, and it is difficult for Dongfeng Infiniti to have a growth dividend. After being included in the Dongfeng Nissan banner, can Infiniti turn the crisis into safety? It's hard to judge.