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Ken Gratton17 Mar 2014
NEWS

Hard slog, but Infiniti shows promise

Once a Japanese brand aimed at North America, Infiniti is going global – but acceptance takes time
What was in the sake back in 1989? In that year Toyota, Nissan and Honda all established new prestige brands aimed at taking the battle up to long-established European marques that had a large swathe of lucrative American market all sewn up. 
The three prestige brands were Lexus, Infiniti and Acura – with Mazda's Eunos following not long after. 25 years down the track the Japanese prestige experiment is not yet validated. Lexus kicked goals in the American market almost immediately, but has not achieved the same level of success in other international markets. 
Acura has never been anything other than a North-American player, as was also the case for Infiniti – until quite recently. An abortive attempt to launch the Q45 model here in the mid 1990s was met with stifling indifference. 
Not until 2005 did Infiniti seriously attempt to break the shackles of its 'for the Americans' typecasting. The company, encouraged by Renault/Nissan boss Carlos Ghosn, set up shop in Europe during 2008 to tackle the prestige brands there head on. 
But it wasn't an auspicious start, as Infiniti's global F1 director, Andreas Sigl explained to students at Monash University last week. 
"We launched in Europe, where CO2 [was] already a big issue, with a V8 engine with 390hp – not necessarily the most appropriate set-up," Sigal explained.
"Then of course we had [the] credit crunch, economic crisis, exchange rates and so forth..."
It was hard to take the company seriously, what's more, when the Infiniti HQ was situated in an encampment of porta-cabins... a far cry from the elegant head offices of the long-standing prestige rivals.
The only products available in 2008 for the European markets were the petrol (V8 and V6) FX SUV and the G37 coupe and convertible. 
"When you go to Europe, the first thing that our dealers were asking was 'Where is your hybrid, where is your diesel... where are your small-displacement engines?' We had nothing of this...
"Now it's a very different picture.
"We came in with a sub-optimal portfolio, but at the same time... strong enough that we could say 'Okay, it's never going to be perfect, [but] we've got to put a stake in the ground."
The European experience is not unlike the challenge currently facing Infiniti in Australia. Asked whether Infiniti product could have been sold here wearing Nissan badges – and thus avoid the cost of establishing a new brand with its own sales channel – Sigl offered the view that the rise of the Internet would quickly lay bare that kind of tactic, to the eventual detriment of the car company. 
"From a pure, opportunistic point of view, it might make sense," he told motoring.com.au. "But I think it would be the wrong way... I don't think you would want to be that pragmatic and sell it in a Nissan showroom, because you just can't do that anymore in the connected world. 
"That's what happened before, in the Middle East and other places. Infiniti was sold out of Nissan showrooms... some smart importers [obtained] product from Russia..."
When does it make sense then for a resource-strapped prestige brand to enter a small market? 
"That's an on-going discussion, because today we are in roughly 50 markets around the world. 
"The cost of entry, versus what it's really worth, I think you have to look at it twice... that's something we look at in our business model. 
"You've got to also be picky, and say is it a premium market or luxury market? Yes, we want to be there. No, we won't make money right away..."
Should Infiniti have waited for Q50 (pictured) before launching here? Sigl professes no concern for the "launch portfolio". Anytime a new brand launches in a market, some product will be fresh and new, but other product, such as the G37, will be older – and the G37 was also recognisably a badge-engineered Skyline when it arrived in Australia. 
What's more important however, Sigl argues, is that the "cadence" of new model cycles will flush away the older offerings. It's the cadence – the rapidity of model change – that matters. 

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Written byKen Gratton
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