Infiniti at turning point as it ramps up localization

Infiniti's all-new Q50 sedan is expected to hit the Chinese market next year. [Photo / China Daily]

After a slump in sales last year caused in part by tensions between China and Japan, Infiniti is back on track to recovery, company executives say.

Infiniti, the premium brand of auto giant Nissan, aims to raise its profile in China to level of the three leading German brands, said Daniel Kirchert, the newly appointed managing director of Infiniti China.

In his first formal meeting with the media since taking the position, Kirchert said the most vital work for the company is not to boost sales in the immediate future but to build brand strength in the long term.

Daniel Kirchert, managing director of Infiniti China. [Photo / China Daily]

"We will improve the brand, service, network and product. And sales will be a result, not a goal," said the 40-year-old German who is a fluent Chinese speaker.

Before joining Infiniti, Kirchert served as senior vice-president of sales and marketing at BMW's local joint venture for six years, during which he gained experience carrying out localization strategies as well as a familiarity with the Chinese market.

He said that localization in China is a priority for Infiniti with headquarters in Hong Kong, now independent from Nissan, and its brand strategy will "smartly" incorporate some Chinese elements in the future.

He added that the core brand value and position of Infiniti will be consistent globally and will underline "emotional appeal and psychological perception", while in China the company plans to "localize the brand connotation in an approach that local consumers can accept".

In the fourth quarter of this year, Infiniti will introduce its new brand positioning globally, he said.

Improving the sales and service network in China is also at the top of the agenda, Kirchert said.

"We will build a quality, healthy dealer network", he said, noting that "mutual benefit" is a keyword that defines the relationship between the company and its dealer partners.

"We will establish a well-rounded dealer management system, including sales policies, ordering process and financial support," he said.

Currently, Infiniti has more than 60 dealerships in China. Kirchert said the company expects the number to reach 80 by the end of next year and double in four or five years. "It is important to cover the cities where Infiniti has no stores yet," he said.

To boost its presence in the Chinese market, Infiniti officially announced its localization project last year-a signed agreement with Dongfeng Motor Corp, partner of its parent company Nissan. It plans to start local production in late 2014.

Located in Xiangyang, Hubei province, the facility is expected to account for more than half of local sales volume the company hopes to increase to 100,000 vehicles in five years.

The new plant will be the company's third, joining one in Japan and another in the United States. There, the company plans to build the long-wheelbase Q50 sedan and the QX50 SUV initially.

Kirchert explained that the choice was made based on solid market analysis.

The segment of each model are among the most popular with local consumers, and together the two segments account for about 40 percent of the nation's total premium car sales. The same segments also include contenders like the BMW 3 Series and the X3 as well as the Audi A4 and Q5.

Currently, China's luxury car market is led by German companies Audi, BMW and Mercedes-Benz, which all have local production in the country and together hold nearly 80 percent market share.

Kirchert said that he believes the market pattern will change and there are opportunities for the premium brands that are currently in the second echelon.

He also gave the example of the US, where the combined market share of the three brands is less than 60 percent.

"Many consumers would like to try new brands and that's the opportunity," he said.

He also said that Infiniti plans to expand its product lineup by 60 percent in the next five years.

"We won't necessarily cover all premium segments but we will cover the major ones," he said.

According to the company, Infiniti's sales in China are recovering from the difficult time of last year.

Its June sales increased nearly 50 percent from a year ago.

The situation in the second half is expected to be better than in the first, Kirchert said.

Infiniti's all-new Q50 sedan is expected to hit the Chinese market next year. [Photo / China Daily]