Dalelorenzo's GDI Blog
26Mar/210

Infiniti’s new chief lays out his grand plan to revive the flailing luxury brand, whose sales have dropped 50% since 2017

Infiniti QX55
New Infiniti chairman Peyman Kargar highlights the just-released QX55 as a sign that the brand's fortunes are turning around.

Infiniti has struggled in recent years, seeing sales fall far behind those of its competitors.
Their cars are "nice enough, but not class-leading or world-beating," one analyst said.
New chairman Peyman Kargar intends to revive the brand with a few key moves.
See more stories on Insider's business page.

Peyman Kargar has a big new job. Appointed in June of 2020 as the chairman of Nissan's up-market Infiniti line, he has taken the helm of a brand in free-fall. Since 2017, Infiniti has seen its sales decline by 50%, one of the steepest plummets in recent automotive history. Last year, the brand sold just 79,000 vehicles in America. Lexus sold 275,000 and increased their market share by nearly 7%. Even Buick sold 162,000 cars. Ford sells about 79,000 F-series pickups every month.

But when we asked Kargar if the brand was in a troubled position, he denied it. "I wouldn't say in trouble," he said. "I would say Infiniti is not giving the maximum of its potential." Clarifying further, he claimed that the brand wasn't thriving for one simple reason. "We didn't bring enough new products to our customers."

This seems like a major issue for a company that's business is selling new cars, especially ones that should exhibit the leading edge of technology and engineering; systems developed for high-end Infinitis should trickle down into mainstream Nissans.

Infiniti chairman Peyman Kargar
Kargar is charged with reviving a brand whose sales have dropped 50% in the past few years.

However, Kargar claimed that the other two "pillars" of the brand beyond product-people, and network-were in fine order. "We have one of the highest levels of satisfaction with customers," he said, neglecting the fact that, in February, Consumer Reports' annual ranking of customer brand satisfaction placed Infiniti dead last.

Moreover, the marque's identity seems murky. "If you think about Infiniti fifteen years ago, the brand message was pretty clear. It was trying to be a Japanese BMW. Performance-oriented, handling-oriented," said Ed Kim, vice president of industry analysis for automotive research firm AutoPacific.

"Over the past decade, the Infiniti lineup has pulled away from this positioning, and it has moved to a positioning that I think is very hard for people to understand or define." Announcements about plans to return the brand to its former positioning, or move it to fully electric-powered platforms-followed by immediate rescinding-did not help clarify things.

According to Kim, this time period has also seen a steep decline in the innovative and compelling nature of the brand's vehicles. "Their products have generally been nice enough, but not class-leading or world-beating," he said. In fact, the offerings have declined to such a degree that the brand must offer strong discounts to bring in customers, competing not with Audis or BMWs, but with well-equipped Hondas. "It's kind of become a price brand, as opposed to a brand that people might lust after," Kim said. "And with a premium luxury brand, value and price is not really the image you want to associate with."

INFINITI QX55
The QX55 we tested featured the same joy-sapping continuously variable transmission Nissan has been saddling its vehicles with for years, as well as uninspired handling, Kia-level materials.

Finally, the brand has failed to distinguish itself from its parent, Nissan. Shared platforms and power trains are necessary to achieve the economies of scale required in the contemporary auto industry. But a premium brand must feel superior in various categories-including driving dynamics, material quality, performance, design, and owner experience-to justify its price and positioning. Infiniti's recent products have not accomplished this. "The QX60 was just a re-skinned Pathfinder," said Kim. "If you drove the cars back-to-back, they drove exactly the same. It's not like the QX60 was even quieter or more refined."

Kargar claimed that the brand's new mission would rectify these issues by focusing on "reconnecting to our heritage and making sure that we are protecting our main values." These values, according to him, include being "daring, forward, and human-centric, and to be able to offer really attractive products related to these values." He also emphasized uniqueness and innovation, and being a brand that "never tried to copy and paste others."

He held up as an example the just-released QX55, a five-passenger, five-door crossover coupe that brings Infiniti back to a category it helped originate in the early 2000s with its high-riding, high-powered FX. Though the QX55 features handsome, creasy styling, and though Kargar touted the fact that Infiniti is "going to be the only Japanese carmaker coming with a crossover coupe," its shape and dimensions mimic almost exactly those of the Mercedes-Benz GLC Coupe, Audi Q5 Sportback, and BMW X4, and follows a format that Honda's premium brand Acura used back in 2009 with its ZDX.

Infiniti QX60 Monograph
"The QX60 Concept looks nice and it obviously doesn't look like a Pathfinder," said analyst Ed Kim.

Kargar also cited the forthcoming QX60, the final design of which has not been locked, but which he said would adhere closely to the smoothly elegant QX60 Monograph concept the brand has shown recently.

Kim vouched for these designs, with a caveat. "The QX55 is genuinely pretty, and the QX60 Concept looks nice and it obviously doesn't look like a Pathfinder," he said. "But it doesn't cost any more money to style a really good looking car than a bad looking car." Styling, thus, doesn't evince real investment. He said that the proof will come only when critics and consumers can drive these vehicles. "If we can tell that a QX60, in its drive experiences, is worth the extra price, and whether the QX55, with its nice styling, is able to justify the premium over a mainstream brand product or against other sporty crossovers in the segment."

Our recent time in the QX55 suggests that the answer is, sadly, no. The model we tested, which was priced at $58,000 with options, featured the same joy-sapping continuously variable transmission Nissan has been saddling its vehicles with for years, as well as uninspired handling, Kia-level materials, and a confounding split-screen infotainment system with a crisp but dysfunctional lower screen, and a woefully outdated and fuzzy upper navigation interface pulled right from the Nissan parts bin, circa 2009.

Perhaps the next round of products will make good on Kargar's more elusive promises. But with parent company Nissan slashing non-core models as it continues to dig out of its fiscal quagmire, and new premium brands like Hyundai's Genesis creating extremely compelling, fresh, and well-designed product at the same price point, time is tight.

"I don't see Infiniti going away," Kim said. "Corporate pride won't let Nissan shut down Infiniti when their primary competitors in Japan-Toyota and Honda-each have premium brands. But it's going to be extremely important for Infiniti to elevate its products from a hardware perspective, as well as from a brand image and consumer perception perspective. There's definitely a lot of work to be done there."

Read the original article on Business Insider

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