Infiniti banks on SUVs and mass electrification
The head of Infiniti, the luxury carmaker owned by Japan’s Nissan Motor Co., is German national Roland Krueger, and it’s his job to make the brand stand apart from a crowd of competitors that include BMW, Audi and Mercedes-Benz.
As Infiniti prepares to celebrate its 30th anniversary next year, Krueger is focusing the company on two main areas: the consumer shift from sedans to socalled crossover sport utility vehicles and larger SUVs, and to an all-electric future.
Infiniti is pinning much of its hopes on the QX50, a new crossover SUV that carries a starting suggested retail price of $36,550.
The company also announced earlier this year that, starting in 2021, all of its new vehicles would be either fully electric or hybrids that combined electric power with conventional combustion engines.
A key reason for the electric push: It provides the vehicles with a power and performance boost, in addition to the environmental benefits, said Krueger, who became Infiniti’s president in 2015 after holding executive posts at Germany’s BMW Group.
Krueger, 53, is based in Hong Kong, but in an interview during a recent visit to Los Angeles he outlined Infiniti’s strategy. Here’s an edited excerpt:
Where do you sell the most vehicles in the United States?
The largest market is actually around New York, in the Northeast. In California, depending on the segment, it’s a good 20% of the total.
How does Infiniti view the shift of consumers wanting more CUVs and SUVs and fewer sedans, such as your Q50 sedan?
It’s a natural progression that has been going on for quite awhile. You see this not only in the U.S. but in the world.
What the SUV offers is more versatility. That’s what people are looking for. Also, you have a relatively higher seating position that gives you a safer feeling because you have more oversight over traffic. That’s one of the attractions of these vehicles.
Having said that, I still believe there are sedans and passenger cars that will be very attractive going forward.
Last year Infiniti reported record U.S. sales of 153,415 vehicles, up 11% from 2016. But in the first nine months of this year, your U.S. sales were down 7.4% from a year earlier. Why is that?
We had a transition from some previous models to new models, and we’re ramping up the QX50 that came into the market. That is going well, and the dealers are very much engaged. We’re quite confident we’re on the right track.
What’s the main thing that separates your vehicles from those of your competitors?
If you do market research, you’ll find one of the top three purchase reasons will always be design. And that’s more than how it looks. Design, to me, is the proportion of the vehicle, the way it stands on the road, the way it looks inside, the whole vehicle. There’s also how it’s built, whether it’s rear-wheel drive, frontwheel drive, etc.
People who buy our cars are attracted to our designs. There is also its versatility and the cost of ownership.
Why the plan to go electric starting in 2021?
That’s also a natural progression, like the SUVs. It’s [electric demand] accelerating faster now. This is what Infiniti will be about in the future.
We still will have cars [with combustion engines] in the market in 2021. As we then replace them with full-model changes, we will go fully into electrification. After a while, it will include all our models.
Nissan has an assembly plant in Smyrna, Tenn. What Infiniti vehicles are built there?
The QX60 crossover.
Do you have plans to build any other vehicles in the United States or build new U.S. plants?
As segments of cars evolve, there will be opportunities to have further production around the world, and we’re always looking around. For the time being, the QX60 is the one being produced here.
Are you concerned about the escalating tariff battles between the United States and its trading partners, in terms of raising the cost of your vehicles?
I’m a car guy and I’m interested in selling cars. So, I concentrate on working within the framework we have. We will adhere to what is given, and we make that work.
You said earlier this year that you hope to triple Infiniti sales in China to about 150,000 vehicles a year in five years, is that right?
Yes, we have very ambitious plans for China. China is the biggest car market in the world and obviously you want to grow over-proportionately there. In the last five years, we’ve grown more than 180% already in China — arguably on a small scale, but we’re getting there.