What’s bad for Nissan is worse for Infiniti. And things are really bad for Nissan right now. Of course, Infiniti is the upscale/luxury division of Nissan. Sometimes it just seems like Nissan doesn’t know what to do with Infiniti. But that’s not what this is about. By the time Nissan gets it together, it will take 10 years. But Infiniti? It will be dead 2030. Here’s why.
A lot happened in 2019 that sets up the inevitable demise of the Infiniti brand. First, parent company Nissan lost 11% of sales in the US. That’s 11% in just 2019. Nissan also saw a 73% drop in global profit in the first two quarters of 2019.
Nissan made no profit in 2019
It is estimated that Nissan made no profit in 2019. Also in 2019 Infiniti was pulled from the Western European market completely. Nissan blamed it on Brexit and a restructuring plan taking place internally.
Some of the problems that plague Infiniti were beyond its control but a lot of what is bringing Infiniti down was self-inflicted. Things like a lack of new models. Over the last several years new models have been a rarity for Infiniti. It’s the lifeblood of car manufacturing but Nissan’s product line has for the most part been left alone.
It’s expensive developing new cars but that’s what the business is
Yes, it’s expensive to develop new vehicles. But that is what the business of making vehicles is; always developing new cars. It’s the price to play and it always has been. Especially now with new safety technology and better manufacturing processes, Having older models hanging around is short-sighted.
Then there is the whole Carlos Ghosn debacle. The former Nissan CEO was arrested for fraud, allegedly misusing company funds, and failing to report some of his earnings. When Ghosn was CEO he pushed dealers hard to meet aggressive sales goals. Dealers in some cases sold cars with no profit just to move the iron for hitting sales targets. Nissan was selling more and making less.
Infiniti’s aged SUVs are 10- and almost 20-years old each
SUVs are the industry’s moneymakers at the moment. They’re hot. But sales have been flat for Infiniti’s flagship SUV the QX80. It made its debut in 2011 making it 10 years old. Things are even worse for Infiniti’s QX50 compact luxury SUV. It debuted as the EX35 in 2003. We’re inching to 20 years that the QX50 has been around. For the hottest segments going Nissan can’t expect to get by with very minor updates for 20 years.
Nissan has admitted old models are a problem. It says that “an aged product portfolio and continuing efforts to normalize sales” have hurt profits. If Infiniti wasn’t draining the obviously limited resources to create new models that might help Nissan get back on its feet.
Nissan’s plan for Infiniti was to hype it as the tech leader
Nissan’s plan to bring back Infinity was to market it around it being the new technology leader. Its VC-Turbo engine was supposed to revolutionize the auto industry with its gas mileage. That hasn’t happened. The hype was that the VC could rival hybrid fuel economy numbers but at 22 mpg that idea was a joke. Nissan’s hype bombed.
Now Nissan is saying that electrification will be Infiniti’s forte. It says that it will take a couple of years. If that is Infiniti’s magic pill it seems a shame. Nissan is the company that kicked off the whole electrification wave with the Leaf back in 2010. To take over a decade to decide this is what will save your flagship brand shows a high lack of awareness on many levels.
Nissan has some painful decisions to make for Infiniti
There are some painful decisions to make in Yokohama. In the short term, we expect to see some models completely dropped. We also expect to see fewer trims and instead a bundling of certain options to simplify manufacturing. We may even see fewer colors and interior variations for the same reason.
It’s a difficult time to be in the car business with all of the uncertainty of autonomy and the slow acceptance of EVs. We hope to see Nissan thrive soon.