Photographer: Qilai Shen/Bloomberg

Nissan Says Worst Is Over for Its Luxury Infiniti Brand in China

  • Sales dropped 2 percent in China while global sales hit record
  • Infiniti is strengthening leadership, marketing team in China

Nissan Motor Co.’s premium Infiniti brand, which lost its China head to a startup and saw deliveries slump in the country, will regain growth in the world’s largest auto market in the second half, said its top executive.

Growth momentum in China will pick up as it resolves a supply issue and introduces the new QX30 crossover at the end of this year, said Infiniti President Roland Krueger. “We are looking at huge potential, still, for Infiniti,” he said. “We need to tap into that.”

Nissan’s premium brand, which set up its headquarters in Hong Kong in 2012 to be closer to the mainland market, has to do better in China if it’s to help Chief Executive Officer Carlos Ghosn achieve his target of capturing 10 percent of the global luxury car market by 2020. The sales slump follows the departure of Daniel Kirchert, who helped more than double sales of the marque in China before he joined a Tencent Holdings Ltd.-backed electric car startup this year.

Infiniti suffered from a lack of brand power and new products, especially as German premium brands introduced a string of competitive offerings, according to John Zeng, a Shanghai-based LMC Automotive analyst, who cited the BMW X1 and X3, and the Mercedes GLA and GLC.

‘Lots of Rabbits’

“The German brands have a lot of rabbits in their hats,” said Zeng. “Second-tier luxury brands like Infiniti face a lot of pressure under such a market environment.”

Infiniti’s global deliveries rose 7 percent to a record 110,200 units in the first six months of this year, with half of the sales coming from the U.S. In that period, it sold about 18,600 vehicles in China, a drop of 2 percent even as its main competitors gained in deliveries. The brand is strengthening its leadership and marketing team in China to prepare for future growth, Krueger said at a media event in Yokohama, Japan, last week.

For a Bloomberg Intelligence primer on Nissan, click here.

Chinese buyers have traditionally equated luxury with German nameplates. Volkswagen AG-owned Audi is China’s top luxury brand, with 30 percent of the high-end market in 2015; BMW is next with 25 percent, while Daimler AG’s Mercedes-Benz line is third, with 20 percent.

Besides the German brands, Infiniti also faces competition from other mass-market manufacturers such as Ford Motor Co.’s Lincoln, which has closed the gap to about 6,000 vehicles in sales in the first half despite 25 percent duties on its imported models.

General Motors Co. opened a $1.2 billion Cadillac factory in Shanghai this year that’s capable of producing as many 160,000 vehicles a year. Sales in China climbed 16 percent to 45,818 units in the first six months.

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