Infiniti loses China? Relocation of Backward Headquarters in Electric Transition to Japan

category:Finance
 Infiniti loses China? Relocation of Backward Headquarters in Electric Transition to Japan


Sales Slip Headquarters Relocation

According to Infinitis official statement, the purpose of moving headquarters back to Japan is to share platform and technology with Nissan, thereby saving operating costs and improving efficiency. Previously, most of Infinitis R&D and product design work has been in Japan, but this time the headquarters will be relocated to Japan, the underlying reason is that Infinitis market performance is not good, and the parent company Nissans profits have fallen sharply.

According to public data, Infinitis global sales in 2018 were 233,400 vehicles, down 5.2% from a year earlier. Sales in the first five months of this year are also lower than in the same period last year, and the future prospects are even more worrying. In 2012, when Infiniti headquarters settled in Hong Kong, China, Infiniti said that the global headquarters settled in Hong Kong, China, marked that the Chinese market has become the center of Infinitis global development, and set a global target of selling 500,000 vehicles annually for Infiniti. Over the past seven years, Infinitis best global sales have been only 246,492 vehicles, less than half the target.

In addition, Nissan, the parent company of Infiniti, is also facing a double decline in revenue and profits. In fiscal year 2018, Nissans automobile revenue was 11.57 trillion yen, down 3.2% from a year earlier, and its operating profit was 318.2 billion yen, down nearly 50% from a year earlier. Nissans expectations for fiscal year 2019 are also not optimistic. Nissan expects its operating profit to drop 28% to 230 billion yen in fiscal year 2019, the lowest since its loss in fiscal year 2008-2009.

Neither China nor the US market can afford any strength.

Faced with such difficulties, Nissan has to strengthen cost control. It is understood that Nissan will end Infinitis business in the Western European market in 2020, while the Sunderland factory in England will suspend production of Q30 and QX30 in the middle of this year. Dongfeng Infiniti also made it clear in its reply to the correspondents e-mail of the Beijing News that its global business will be re-concentrated in North America and China. Infiniti attaches great importance to the development of these two markets and their market potential. According to reports, Infiniti plans to launch its first electric vehicle in China, while focusing on SUV product line in North America market, further boosting the development of Infiniti in the two major markets through strategic adjustment. Infiniti said that by adjusting the global strategic focus and continuously improving the quality of operation, we should lay a solid foundation for comprehensive electronics and future product development, with a view to achieving the brand vision of becoming an important member of the mainstream luxury car camp.

However, from the present point of view, sales volume is not strong either in China or in the US market. Data show that in April this year, Infiniti sales in the U.S. were 8491, down 5.2% from a year earlier, and the cumulative sales in January-April this year were 42,806, down 14.1% from a year earlier. In the Chinese market, Infiniti sold 3098 vehicles in May, down 7.8% from a year earlier. Among them, Q50L, as a veteran model, sold only 833 vehicles, down 51% year on year. Industry insiders said that this is a dangerous signal for Infiniti, which may become a niche brand, thus stepping into the aftermath of eulogism.

Electric transformation has lagged behind

Dongfeng Infiniti said that it would constantly insight into the development trend of Chinas market and changes in the demand of Chinese consumers, constantly promote the localization strategy of Made in China, for China and continue to build industry-leading product matrix. But since 2014, Infiniti has only two domestic models - Q50L and QX50. Q50L has entered the second half of its life cycle since its mid-term revamp. Although QX50 is a brand-new model that went on sale in mid-last year, its sales growth rate has slowed down significantly compared with the product updates and prices of direct competitors Cadillac XT5 and Volvo XC60. To this end, Dongfeng Infinitis reply is vague. It only means that on the basis of the existing rich and diversified high-quality products, it is orderly launching more, stronger and better high-quality products according to the established plan. According to Beijing News, Infinitis next domestic new car is expected to be launched in 2021, which also means that Infiniti will be in the market in 2019 and 2020. The product line-up will not change significantly in a years time.

Infiniti has emphasized that in line with the current development trend of new energy in the automotive industry, it actively promotes the distribution of electronics. At present, almost all luxury brands are accelerating the layout of new energy vehicles. Audi, Mercedes-Benz and BMW, the first-line luxury brands, are planning to launch brand-new electrified products this year and next. Industry insiders believe that Infinitis electrification has been slow, so the prospects for transformation are not good to predict. Cui Dongshu, Secretary-General of the CPPCC, told Xinjing News that no matter where the headquarters is, it is not important for Infiniti. The key to win the Chinese market is to enhance its product strength and increase its marketing efforts.

Source: Wang Xiaowu_NF, Responsible Editor of Beijing Newspaper