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Ken Gratton22 Jul 2015
NEWS

More dealers a priority for Infiniti

Sales volumes held back while prestige brand lacks national presence

Infiniti is planning to expand its dealer network in Australia, after years of promises unfulfilled.

During the media launch for the QX80 SUV yesterday, Infiniti Australia MD, Jean-Phillipe Roux revealed that the company will make an announcement concerning its dealer network before the end of this year. In subsequent discussion with motoring.com.au, Roux hinted at new dealerships in Sydney and Melbourne, plus an inaugural dealership in Perth will be announced at that time.

"More representation in Sydney, more representation across Melbourne... these are the two priorities, [followed by] Perth, and then potentially yeah, Adelaide – whether as a tier-one or as a tier-two [dealer]. Maybe they'll start on the back of a service and parts [facility], and then evolving as the [sales] volumes grow... taking a bit more of a pragmatic approach as the volumes grow, maybe moving from tier-two to tier-one."

By 'tier-one', Roux refers to a dealership offering the full brand experience – sales, service and parts. A 'tier-two' dealer would be one focused on parts and servicing alone. Roux foresees the possibility that a tier-two dealer could become a tier-one dealer. By implication a tier-two dealer would be expected to morph into a tier-one dealer in due course. What will drive that migration is the growth of sales volumes and improved (national) brand recognition.

"What we're looking at is a two-tier-approach... the big cities, the major cities have a presence with the best possible representation in terms of brand experience," Roux explained. "On the – let's say – second tier, with cities that might not have potential now, but might have potential tomorrow, [it] starts maybe on the back of a service and parts dealership."

Reading between the lines, Roux sees potential for at least one more tier-one dealer each in Sydney and Melbourne. Perth is ripe for a tier-one dealer in very short order, and Adelaide, which is set to follow not long after Perth, may start out as a tier-two dealer.

"Currently, if I'm looking at it in pure numbers, I think there is more market in Perth than there is currently in Adelaide. But Adelaide will be just after Perth...

"We're working on Adelaide, [it's] just a matter of deciding whether tier-one or tier-two..."

To date, Infiniti has been selling cars in Australia out of just three dealerships – one in each of the three east-coast capitals. Early plans for Infiniti dealers in Adelaide and Perth never reached fruition.

According to Roux, Infiniti will stick with its existing strategy of prestigious premises in a compact footprint for new-car sales, supported by a parts and service facility in a different location – and likely shared with other brands sold and serviced by the multi-franchise dealers.

"What we're trying to do is we're trying to preserve a brand experience, so the showroom has to be fitted with Infiniti-standard material, colours and everything. Then when it comes to back office, which is service, yes, service can be shared with different brands."

Getting the dealer network into shape ahead of the local launch of the new Q30 hatch next year will be critical to Infiniti's brand recognition and consequent sales growth in Australia. With new dealers in place – across Australia – a sales splurge from the Q30, the QX30 crossover and the Q60 coupe will be supported by that key infrastructure and driven by a national advertising campaign.

For the year to date Infiniti has sold just 271 cars. That's a 29 per cent increase from the 210 cars sold for the same period in 2014, but it's from a low base, as Roux admits, and it's still nowhere near enough. Not when the German prestige brands are now selling above 20,000 units in a year. Even Lexus has sold 4453 cars for the first six months of this year.

Roux attributes Infiniti's slow sales to lack of brand awareness rather than any inherent flaw in the product range. And a contributing factor in that lack of awareness remains the lean dealer network once more.

"You cannot develop so much volume on the back of only three dealers. Melbourne is being covered by Brighton. There are some limitations to people actually living in parts of Melbourne having to drive to Brighton to buy an Infiniti...

"Same applies to Sydney..."

However, Roux is not so concerned by the slow sales that he feels Infiniti needs to relaunch for the introduction of the Q30 and other new models coming out next year. While the brand remains small (in terms of sales volumes and dealers), the importer will continue to run on something of a heavily trimmed budget. As like as not, for instance, there won't be any TV commercials for the new Q30, despite its importance to the brand.

"I'm not saying we'll have TVCs [for the Q30 launch]," Roux said, "but we'll have more brand presence... being perceived as a more national player. It doesn't mean we go on TV necessarily...

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Written byKen Gratton
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