Manufacturing News

Nissan to Name new Global Chief of Infiniti after Moving Brand's HQ to Hong Kong

Nissan Motor Co., Japan's second-largest carmaker, is preparing to name a global head for its Infiniti luxury brand after moving the unit's headquarters to Hong Kong this week.

Nissan has made its choice and the executive will be named "at a fitting time," CEO Carlos Ghosn told reporters in Hong Kong. Nissan, which introduced the luxury brand to China in 2007, plans to increase China sales by 50 percent this year, he said.

Nissan is counting on China to help drive growth and challenge Audi AG, Mercedes-Benz and BMW AG. Ghosn plans to more than triple Infiniti sales to 500,000 units in five years to raise its share of the global luxury car market share to 10 percent.

To do so, Nissan plans to produce Infiniti vehicles at its joint-venture assembly plant in Hubei province, according to Chinese media reports.

"What they are trying to do in China is what Toyota's doing in the U.S.," said Kota Yuzawa, an analyst with Goldman Sachs Group Inc. "It's very much from scratch. Lexus 20 years ago was also from scratch."

Global management, sales and marketing staff for the brand will be in Hong Kong, while engineers will remain in Yokohama, Japan, said Haruko Wada, a spokeswoman for Infiniti in Hong Kong. The new headquarters will have 100 employees by year end.

'Center of gravity'
Nissan's deliveries of Infiniti vehicles in China climbed almost 40 percent to 19,000 units last year, making China the luxury brand's second-largest market after the United States, where two-thirds of Infiniti cars were sold last year.

"Establishing our headquarters in Hong Kong, the gateway to China, is an acknowledgment of the center of gravity in luxury vehicle sales," Andy Palmer, the Nissan executive vice president in charge of Infiniti, said in a statement. He said dealerships will increase from 25 last year to more than 100 over the next year.

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 United States and 16 percent in Europe, Yuzawa wrote 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 in 2014. The company unveiled a stretched version of the Infiniti M sedan designed for Chinese customers last month at the Beijing auto show.

New Infiniti markets
Nissan manufactures most Infiniti models in Tochigi, Japan, about 100 kilometers north of Tokyo. The yen's climb, reaching a postwar high in October, led the company to reduce Japan production. In January, Infiniti JX SUVs started rolling off assembly lines in Tennessee.

"The challenge is how they will bring new models to meet local demands," Masatoshi Nishimoto, an analyst with IHS Automotive, said this month. "The Chinese premium car market already is very competitive as there are German luxury brands like Audi and BMW that have already established a good reputation among local consumers."

Infiniti vehicles are sold in 46 countries and regions, with the company planning to expand that to 70 markets by 2016. This year, it will add new markets including Australia, Mexico and Brazil, Ghosn said.

The company plans to produce vehicles at "full speed" and stockpiling is "not an issue for Nissan" in China, where industry vehicle sales may increase 7 to 8 percent this year, Ghosn said.

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