http://www.autoweek.com/cat_content...._code=06928046

(08:22 May 12, 2003)
Infiniti SUVs, G35 are hot; big sedans wither on vine

By MARK RECHTIN | Automotive News

Infiniti Division has become a study in extremes.

Its G35 sedan and coupe are selling strongly, and the just-launched crossover FX45 and FX35 sport wagons are making a dent in the high end of the SUV market. But sales of the marque's flagship sedans are going nowhere.

Infiniti sales through April are up 33.3 percent to 35,176 units, a strong showing from last year's record numbers. But the gains are entirely coming from the G35 and FX sport wagons.

The previous volume leader, the entry-luxury I35 sedan derived from the old Nissan Maxima, has been mostly supplanted by the G35, and its sales are off by half this year. What's more, sales of Infiniti's premium Q45 and M45 sedans are limping along far below projected levels.

When the M45 was introduced last fall, the division wanted to sell 12,000 units annually, in addition to at least 10,000 copies of the Q45, which was redesigned in spring 2001. But those targets seem pipe dreams, as neither one seems capable of selling more than a few hundred units a month.

For the four months through April, Q45 sales are off 41 percent from a year earlier to 818 units. Sales of the M totaled just 1,347 units in the same period.

A top executive admits Infiniti miscalculated the M45 launch. Infiniti already had won a massive media presence launching the G35 and FX45, and figured that word-of-mouth would sell the M45. Wrong.

"We knew the G35 and FX45 would draw attention to Infiniti, and thought that the M45 would do fine with just print ads and store traffic," says Jed Connelly, Nissan North America Inc. senior vice president of sales and marketing. "But people didn't know enough about the M45 to switch from whatever they were shopping for initially."

To adjust, Infiniti is relaunching the M45 with spot TV ads on cable and on Sunday morning network news programs. Connelly declined to give the cost of the relaunch.

But Eric Noble, analyst with The Car Lab in Santa Ana, Calif., says the problem with the M45 is the product, not its marketing.

"The M45 was designed for the Japanese market. It's a seven-eighths package being marketed in an eight-eighths-scale market," Noble says.

On the other hand, Noble adds that the capital risk is low for Infiniti: "Getting full certification for the U.S. costs about $10 million, so it's not hard to recover the costs, and it doesn't damage the brand. It's a place holder."

Indeed it is. Infiniti plans to redesign the M45 just two years from now.

Damage control

Connelly isn't so worried about the Q45, even though Infiniti already has performed damage control by adding features just 18 months after the launch.

The changes seem to have had little effect on sales volumes. But with transaction prices on the redesigned model $10,000 higher than its predecessor, Connelly will take the slower sales as an alternative to turning on the incentive faucet like Infiniti used to do.

"We won't do heroic things to pump volume," Connelly says. He claims Infiniti incentives per new unit retail are lower than any other luxury make.

Incentives analyst Art Spinella of CNW Marketing/Research in Bandon, Ore., confirms that Infiniti lags the incentive-spending race by "a substantial amount."

In April, Infiniti spent about $1,200 per unit on incentives, down from the April 2002 mark of just less than $1,800. By comparison, Mercedes-Benz incentives have increased from $2,027 last year to $2,870 this year, according to CNW data.

"Consumer aspiration for Infiniti has almost doubled in a year," Spinella says. "They are taking the tack of letting their models reach whatever their natural water level is. At some point they may have to support their slower-selling cars more, but at this point they basically are leaving them alone."

Eventually, Infiniti aims to sell 150,000 units annually.

Connelly wants to expand the dealer network to 175 dealerships from its present count of 160, mostly by backfilling existing metro markets. That would result in about 850 sales per year per dealer annually.

Reaching that goal may be difficult with just two hit products. But such a tenuous product situation could change quickly.

My parents went and test drove an FX35 for my mom and she liked it, and that dealer's inventory listed on infiniti.com has almost 50 FX's in stock. They have 70 G35 Sedans, and a grand total of one G35 Coupe.

There's only 3 Infiniti dealers in the whole DC metro area and all of them are running huge inventories on the G35 Sedan and FX. In the whole metro area there are only two G35 Coupes in the inventory.

I think Infiniti is being smart limiting the availability of the G35 Coupe, because right now there is a glut of Z cars on Nissan dealer lots that are not selling awfully quickly. Now if only the M45 or Q45 were a viable competitor in the luxury market they'd be on to something.

Nissan has already shown that the FM platform can be made into a bigger car in the FX, now if they used it to make a mid-size rwd sedan to go up against the 5-series, E-class etc I'm sure they could pull it off pretty well.

 

Inventories can be misleading. They may have just taken delivery of a boatload of cars - or maybe the system hasn't been updated on a timely basis. In my area, granted we only have 1 Infiniti dealership, you have to wait for any FX or G35C model. And the G35 sedans still sell pretty well they say.

Its a shame the Q isn't doing better, as its a very nice car. The M was just a horrible mistake, but as they, its just a placeholder til the new one comes in 2 years. Hopefully they will make it a grue 5-series/GS competitor.

 

Like the article said, they're not trying too hard to increase the sale number. I'm sure they can do it with lower prices but they just don't want to. The M45 is not hurting them too much I think because they already made up the cost of R&D with the sales in Japan. That's probably another reason why they're not trying to hard to push the sales number of the M either.

If you noticed, all new models from Nissan/Infiniti are selling well, while old models are severely lagging. I'm sure when they redesign the laggin models, it'll sell just as well. Just make stretch the FM platform for the M35/45 and it'll sell just fine and it'll cost them much less to make too.

 

I like how the FX looks but i really like the G35 Coupe alot

 

do they realize how terrible the Q45 and M45 look???

the Q actually isn't THAT bad, but the M45 is just terrible. anyways, it hadn't occurred to me that the G35 might draw sales from the I35. i really love the I35. does anyone know if they're going to keep it around, and/or redesign it with the new maxima? the I35 is what the previous maxima SHOULD have been. geezus...

 

This is the reason why I often dismiss new releases from Infiniti/Nissan. (and other car makers as well) The I35 and the Q are not that old...yet their sales are sagging. I cannot speak on sales of the G35 sedan, but the original post said the DC area had a large inventory....and they weren't moving very fast.

Seems like Nissan's cars create a lot of hoopla when they come out, but their designs don't seem to age to well. Possibly because they are easily outdone by their competitors?

Case in point, the G35 will most likely be trounced by the new TL.

 

Well, the Q45 has never been a great seller so people better know what they're buying when they're considering the Q45. I would still take the Q45 over the other competition anyway. The I35 is OLD. It's based on the old Maxima. It's FWD and it will most likely be dead in a year so I'm pretty sure the slow sales could also be attribute to Nissan shifting production from I35 to G35. G35 sedan are still selling well. Obviously the're not selling every single one they made but neither is any other car. I see plenty of TL too, does that mean they're selling poorly?

If resale value is so important to you, then maybe you should consider Lexus or BMW then. Unless the TL will have AWD, there's no way the next TL will trounce the G35, at least not in driving dynamics. Sure it can be more luxurious, but the ES330 is already perfect for that.

 

Not surprised at Infiniti's modesty about the M45 and Q45. The problem is these machines look sporting and are quick, but don't handle like a lot of their competitors. Plus they lack the affluence Lexus, Mercedes-Benz or BMW offers.

For $50,000, buyers want more than a car's performance, they want the affluence that comes with the brand. Infiniti has never been able to establish this.

 

very well said. Lets just hope that the G35 and the FX will start to put Infiniti on the map. They've been trying to be a me too Lexus for way too long.

 

There is going to be a new M45 coming out for 2005 so the current one is more of a place holder in the lineup than anything else. The car has been sold in the Japanese market with different equipment and powertrains as both the Nissan Cedric and Nissan Gloria since the 2000 model year. If it can be modestly profitable in the US market for a couple of years then it's done its job.

For 2005 I expect something designed more along the lines of the new FM-platform cars that have been coming out of Nissan lately. The FX uses a modified version of the FM platform so I'm sure a mid-sized sedan could be created out of it too. Give it the same engine options as the FX, maybe even an awd option and I'm sure it would sell as long as it looks good and seems like enough of a step up from the G35. Pricing would hopefully undercut the Lexus GS by a few thousand dollars.

I think the earliest the Q45 will be replaced is the 2006 model year. It would probably not be able to be built on the FM platform since it is too large, so perhaps instead of building an FM-based M45 replacement Nissan may share the platform with the new Q as it does now. I would expect a nice big car with the same level of gizmos it has now but with more elegant styling.

Also there is still the possibility that the next GT-R will be sold here as an Infiniti. If that does happen, perhaps the turbo system could be adapted to the V8 to create a high-performance version of the Q45 to go up against the likes of the S55 AMG. That's maybe a bit overambitious but it would certainly generate attention for Infiniti at the high end of the price spectrum all the way down.
The inventories are big because there are only 3 Infiniti dealers in the area. There are 5 Lexus dealers and 8 Acura dealers in the same area. From what I could gather after talking to my parents both the G35S and FX are moving fast, but they're being sold out of dealer stock rather than by pre-orders which is the case with the G35C.
The I35 is gone after the 2003 model year. There probably isn't going to be a rebadged Infiniti version of the new Maxima because Nissan is setting up for all of its cars in the US market to be fwd while Infiniti sells the rwd or awd ones.