Infiniti faded the luxury brand "outerwear" Nissan's strategic adjustment entered a period of contraction and transformation

Reporter Gong Mengze

In the context of Nissan's efforts to reduce expenses, the return to Dongfeng Nissan has become a necessary move for Infiniti to survive.

On January 5, 2022, Dongfeng Motor Co., Ltd. officially announced that Dongfeng Infiniti will be included in Dongfeng Nissan's management system as an independent business headquarters. This means that Infiniti will "downgrade" its internal "downgrade" from an independent operating brand to Dongfeng Nissan's brand in China, alongside Nissan and Venucia.

In this regard, Dongfeng Motor Co., Ltd. said that after the return, Infiniti will make full use of Dongfeng Nissan's advantages in research and development, manufacturing and management, explore new business models, and contribute to Infiniti's electrification, automatic driving, mobile Internet and shared travel.

"Infiniti's presence in the luxury car market has been weak." Jia Xinguang, chief analyst of China Automotive Industry Consulting and Development Corporation, said that the brand adjustment is to reduce expenses and losses in the case of sluggish sales. According to Dongfeng Nissan's original strategic vision, Infiniti will become an independent world brand, but it is difficult to achieve this goal. According to the data, Dongfeng Infiniti will sell only 25,700 vehicles in 2020 and only about 10,000 vehicles in 2021.

Infiniti brand "downgrade"

Returned to Dongfeng Nissan into an independent business unit

Amid years of poor earnings reports, production and sales data and investor doubts, The Big Ship of Nissan finally turned the bow and sailed to the reform deep water area. Infiniti, its luxury brand, has become a pioneer, and it has faded the luxury brand coat and classified into the ranks of ordinary brands.

According to the data, Infiniti is a luxury brand under Nissan Motor, and before the establishment of Dongfeng Infiniti, the industry generally believed that its operating model in China would adopt a similar model to FAW-Volkswagen Audi, that is, Dongfeng Nissan set up an exclusive business unit for it. In fact, in 2014, Infiniti and Dongfeng Group established a joint venture company Dongfeng Infiniti, which operates in parallel with Dongfeng Nissan.

The "Securities Daily" reporter observed that in September 2021, Nissan Motor released the "NissanNext" corporate transformation plan, the core of which is to shrink the global market and focus more on The domestic markets of China, North America and Japan. As a luxury brand under Nissan, Infiniti's chief operating officer Ashwani Gupta revealed that in the transformation plan, Infiniti is positioned as "Nissanplus".

It's also the equivalent of announcing in disguise that Infiniti will withdraw from the luxury brand segment and make more use of Nissan's platform and components, including the parent company's e-Power hybrid system. For the change in positioning, Ashwani Gupta said bluntly, "Infiniti may only be able to survive better if it becomes less luxurious, and surviving is the premise for Infiniti to become great again and return to the peak."

In fact, as the first object of Nissan's transformation and reform to be "cut", Infiniti is not "wronged". In 2016, Infiniti's sales growth rate plummeted from 33% in 2015 to 3.4%; in 2017, Infiniti experienced a brief highlight, with cumulative sales of 48,408 vehicles, and the growth rate picked up to 16.4%; in 2018, Infiniti's sales, which lacked resources, declined again and continued until 2021.

In addition, in 2018, Infiniti's parent company, Nissan Motor, saw a sharp decline in global operating profit by 45%, the lowest level in nearly 10 years; in fiscal 2019, Nissan Motor's net loss was 671 billion yen ($6.2 billion), the largest loss in nearly 20 years, which also indirectly increased public attention to Infiniti's performance.

Nearly 10 years into the Chinese market, during this period Infiniti's sales in China has not been able to break through the 50,000 /year mark, compared with Lexus, Cadillac and other brands, Infiniti is obviously "left behind". After the establishment of Dongfeng Infiniti, the company only had two models on sale, the Q50L and QX50, until December 2021, when the third model (medium and large SUV QX60) was late.

It is also in this context that Infiniti has announced its withdrawal from the European and Australian markets in recent years, moved its global headquarters from Hong Kong to Yokohama, and carried out a series of high-level personnel changes. Change is brewing within Infiniti.

The development of Japanese luxury cars in China is difficult

Dongfeng and Nissan entered a period of deep adjustment

According to the reporter's observation, in the "Japanese top three", only Toyota's Lexus's high-end road has gone smoothly, even in the overall downturn of the global auto market in 2020, its global sales still reached nearly 720,000 vehicles. Among them, sales in China exceeded 220,000 vehicles, constantly breaking records. In contrast, Nissan's Infiniti and Honda's Acura have sold less than satisfactorily on a global scale, especially in the Chinese market.

In view of the common situation of the two, analysts believe that Infiniti and Acura are weak at the brand level. The Toyota behind Lexus is one of the world's three giants, and its strong financial resources are enough to support the brand's luxury attributes. The parent company behind Infiniti and Acura is relatively small, and the marginal effect is difficult to play.

Jia Xinguang told the "Securities Daily" reporter that it is easier to accumulate weight after the decline in the brand image of luxury cars, unless new models or new sales strategies are vigorously launched, otherwise it is difficult to recover in the short term.

It is worth mentioning that Infiniti's return to Dongfeng Nissan marks the transformation of Dongfeng Motor Co., Ltd. into a deep-water area. In fact, before Infiniti, Venucia also underwent similar internal "relegation" adjustments. In December 2020, Dongfeng Motor Co., Ltd. announced the integration of its business units, and Venucia returned to Dongfeng Nissan after three years of operation as an independent brand.

"The company's transformation has begun on January 1, 2022," Dongfeng Motor Co., Ltd. replied to reporters, "Through a series of reform measures such as business integration and optimization, Dongfeng Motor Co., Ltd. will continue to provide high-quality products and services for nissan, Venucia and Infiniti consumers." "It can be expected that Infiniti's adjustment is just the beginning, and more changes may occur in 2022."

Behind the series of adjustments, it reflects that Nissan's strategy in the Chinese market is changing, and focus and coordinated development will become the main theme. In addition, while integrating the brand, electrification will become nissan's most important transformation direction. In its latest Vision 2030 released in December 2021, Nissan said that China, as its most important market, will account for more than 40% of total model sales by fiscal 2026. According to the data, due to the impact of the new crown pneumonia epidemic and raw material shortages and other factors, Nissan's cumulative sales in China from January to November 2021 were 1.2448 million units, down 3.1% year-on-year.