Luxury maker Infiniti is planning to begin production of two new models in China in 2014, part of aggressive global growth plans that also include shifting the Nissan Motor Co. division’s headquarters from Japan to Hong Kong.
Infiniti officials said they aren’t worried about an apparent slowdown in the Chinese market during the first quarter of 2012 – nor about the challenges some makers have had delivering world-class quality from Chinese assembly plants.
“If the quality isn’t there, we won’t launch,” Andy Palmer, the executive vice president who oversees the Infiniti division, said during the first press day at this year’s Beijing Motor Show.
But the maker’s Nissan division has so far had very positive results at its own Chinese operations, which now rival the best in Japan, company officials stressed, giving them confidence they can move ahead with their plans to shift production of at least two Infiniti models to the Middle Kingdom.
“For the brand to reach its aggressive sales target of 500,000 units by 2016, local production in the world’s largest automobile market is not an option but a necessity to our success,” said Palmer.
Infiniti has long been a second-tier player in the global luxury car market, but in a subsequent conversation with TheDetroitBureau.com, he indicated the brand is betting on emerging markets in Asia to push it into the top tier, alongside such well-known European luxury marques as Mercedes-Benz and BMW, as well as Japanese rival Lexus.
The Chinese luxury market has been one of the world’s fastest-growing, encouraging virtually every high-line player to begin production – necessary to sidestep stiff import duties. Cadillac recently announced it will begin producing at least two of its own models in China, including its new XTS flagship sedan.
But there are some disconcerting trends. Most luxury makers have been cutting prices in recent months – Mercedes by as much as 25% on some S-Class models. The overall Chinese market saw sales growth plunge from double-digit levels to a mere 2.5% during the first quarter of 2012. And a new report from J.D. Power and Associates warns that a growing number of Chinese dealers are either just breaking even or have fallen into the red in recent months.
Nonetheless, most analysts and industry planners are anticipating a turnaround later in the year. Nissan CEO Carlos Ghosn forecast the overall Chinese market will jump at least 5% for the full year and that the growth rate will run between 6% and 10% over the next few years.
The Infiniti brand revealed a stretched hybrid version of its mid-range M line, the M35hL during this year’s Beijing Motor Show. The biennial event is full of upscale products, from the stretched version of the BMW 3-Series all the way up to a limited-edition Diamond Jubilee version of Bentley’s flagship Mulsanne sedan – all suggesting that Infiniti isn’t the only brand expecting a quick recovery of the Chinese luxury car market.