Infiniti has come to recognize there are limits to its global growth plans, the Nissan luxury brand announcing it will pull out of Western Europe by early next year.
Going forward, the brand will limit its scope to just two markets: the U.S. and China. Along with ending sales in Europe, Infiniti also will halt production of the Q30 and QX30 models at Nissan’s assembly plant in Sunderland, England. The parent company has raised questions about the broader viability of that plant as Britain struggles to manage its planned exit from the European Union later this month.
A broader restructuring by Infiniti will see the luxury marque pair back on its overall product line-up, the brand’s new global CEO told TheDetroitBureau.com during an interview earlier this year.
The decision to pull out of Europe comes as Infiniti’s sales there have been on a long, downward trajectory, tumbling half last year to just 5,800 vehicles.
“Western Europe remains the most challenging and competitive region for premium cars,” Infiniti’s chief spokesman, Trevor Hale, told the Reuter’s news service.
(Infiniti charges into Detroit with QX Inspiration battery car concept. Click Here for the story.)
Launched in 1989, the same year that Nissan’s arch-rival debuted its own Lexus brand, Infiniti has struggled for much of its existence, lagging well behind its Japanese luxury competitor, as well as more established high-line brands such as BMW and Mercedes-Benz.
In 2011, Infiniti moved its headquarters from Tokyo to Hong Kong in a bid to separate itself from parent Nissan and give it momentum for a global roll-out. It laid out plans to expand its traditionally small product line-up and boost global sales to 500,000 by 2017. While it did set a sales record that year, worldwide demand only reached 246,492, or less than half the target.
Demand fell about 6% in 2018, Europe taking a chunk of that blame. “The commercial reality for Infiniti in Western Europe is that there is simply no visibility of a viable and sustainable business, especially given the regulatory challenges,” said Hale.
The PR chief tried to put a positive spin on the decision to exit the reason, noting it will make it easier to focus on Infiniti’s remaining markets, North America and China.
The company said it is looking to find alternative opportunities for its 51 direct employees in Western Europe. The move also will impact 55 retail stores in the region.
The decision to exit Europe follows a shake-up in top management early this year that saw the departure of Roland Krueger.
Over the last few years, Krueger seemed intent on chasing the German marques that dominate the high-line market. That meant adding an array of new products. But trying to compete, model-for-model, isn’t something that Infiniti has the resources to do, stressed his successor, Christian Meunier, in an interview with TheDetroitBureau.com at the North American International Auto Show in January.
“Our goal isn’t to have 20 to 30 products, but 10 models that are more relevant to us,” he explained, noting that Infiniti will have to follow broader industry trends that see a shift away from traditional sedans and coupes in favor of SUVs and CUVs.
Infiniti, Meunier also said, will continue its ongoing shift towards battery-based drivetrain technologies, whether hybrid, plug-in or pure battery-electric.
(For more on where Infiniti’s new CEO wants to take the brand, Click Here.)
That echoes the strategy parent Nissan is taking.
Nissan is also rethinking its European strategy. The mainstream brand is far more successful than its up-market subsidiary. But Nissan has had a heavy presence in Britain. And, with UK lawmakers on Tuesday again voting down the deal Prime Minister Theresa May’s government negotiated with the European Union, that is creating a crisis across the EU.
Even before the latest Brexit vote, Nissan has been rethinking its presence in Britain, scrapping plans to build the new X-Trail sport ute at the Sunderland plant. The latest twist could lead it to take steps to further protect itself against the potential hazards ahead.
(To see more about Infiniti’s “electrified” concepts, Click Here.)