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OPINION | Why Infiniti's collapse in SA was an 'entirely predictable failure'

2020-01-15 04:30

Lance Branquinho

Image: NewsPress

Nissan is trending for all the wrong reasons this month, as the Japanese company has faced a barrage of conspiratorial accusations from its former savour and CEO, Carlos Ghosn. 

Beyond its operational issues (profits down by more than a third in 2019) and the Ghosn-affair, Nissan has another problem: Infiniti. 

The Japanese are masters at market interpretation, but it helps to lead instead of follow-on.

Toyota recognised that its engineering and quality could capture American market share, from German rivals, if premium Toyotas were differently branded.

Lexus was born and proved enormously successful at executing this vision. Nissan attempted to replicate Toyota’s strategy with Infiniti. Which has been a lot less successful.


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Surging rivals

Although Infiniti did manage to produce a collection of daringly styled and mechanical competent vehicles in the 2000s, it has suffered much the same problems Nisan has, in the last decade.

Platforms and technical specifications have aged, whilst Korean car companies, once never a threat in the luxury market, are surging. 

Despite advice to the contrary, evidenced by domestic Lexus sales volumes, Nissan decided to introduce Infiniti to South Africa, back in 2012. Infiniti effectively ceased its South African operations in silence, by 2017. 

It was yet another setback for Nissan’s luxury division, but also an entirely predictable failure. 

Nobody pays premium for a Japanese sedan 

When Infiniti launched in South Africa the model mix included luxury sedans, soft-tops and coupes. All the wrong cars in a market where those vehicle segments were shrinking and completely dominated by German legacy models.

Competing against the Germans, Jaguar and Lexus was always going to be an impossible business case. To its credit Infiniti also had luxury SUVs, but again: the South African appetite for Japanese luxury SUVs correlate directly to their off-road ability. 

Wheels24 archives: Infiniti Q50 review

Toyota’s Land Cruiser models do fantastically well locally, because they have robust components and proven long-range off-road ability. Their value is utility, not desirability. 

Infiniti’s South African SUV product portfolio contained elegantly styled vehicles, with huge alloy wheels and daring design. But the issue was that these SUVs competed directly in purpose (again) with German rivals and Range Rover. 

Is the Infiniti chapter closing for Nissan? 

Infiniti should have done better locally. There could potentially have been import cost price support, with transferred export credits from Nissan’s South African vehicle assembly programme. 

With price support in place, Infiniti could have had a theoretical pricing advantage over other premium imported brands, such as Jaguar/Land Rover. 

Globally the Infiniti brand has been struggling since 2017, the year it exited South Africa. Sales are collapsing in America, which is Infiniti’s most important market. Infiniti has also essentially given-up in Europe. 

There appears to very little regarding a future business case for Infiniti. Its current products are way too old and the one new crossover (QX50), is not gaining any sales momentum despite an innovative variable-compression engine. 

In retrospect, Infiniti’s South African failure might have been symptomatic of a larger issue at Nissan, which appears to be adrift in 2020, as by far the most vulnerable Japanese automaker in a stormy market of disruption. 

Disclaimer: Wheels24 encourages freedom of speech and the expression of diverse views. The views of columnists published on Wheels24 are therefore their own and do not necessarily represent the views of Wheels24.

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