Australia ‘not a way forward’ for Infiniti

UPDATED: 3/9/2019

INFINITI has admitted that “there was not a way forward to achieve a viable business case” in Australia and will withdraw from this market before the end of next year.

This announcement made on Monday officially ends a struggle that began when the Nissan-owned premium brand set out again in 2012 to take on established luxury car-makers such as Audi, BMW, Jaguar, Lexus, Mercedes-Benz and Volvo.

It also confirms speculation that Australia would be next in line for the chopping block – despite official word to the contrary – after Infiniti confirmed its departure from Western Europe in March and started its retreat to strongholds in North America and China.

Infiniti Motor Company general manager of global communications, Trevor Hale, told GoAuto that the about-face was a consequence of the company’s “strategic plan to focus our business on global priorities”.

“We completed an evaluation on Australia that concluded, regrettably, that there is not a way forward at this time to achieve a viable business case for Infiniti and its partners,” he said.

Asked if there would be any knock-on effect to Infiniti New Zealand, which is operated by a private importer that in 2017 established dealerships in Auckland and Christchurch, Mr Hale said: “There is nothing new to announce regarding Infiniti’s business in New Zealand.”

Echoing its Western Europe withdrawal announcement, Infiniti named electrification of its product portfolio over the next three years as a brand priority, along with a focus on SUVs for North America and the launch of five new models in China during the next five years.

Asked about Infiniti’s future in other regions, Mr Hale clarified – using present tense – that Infiniti “continues to operate in the Middle East, Eastern Europe and other markets in Asia”.

Infiniti Cars Australia corporate communications director Karla Leach confirmed the decision had been handed down from Infiniti headquarters in Hong Kong and that the brand’s withdrawal timeline would provide “the smoothest exit from the market”.

Compared to closing up shop with immediate effect, Ms Leach said the process would enable the company to “not only look after our current customers and future customers but also to have a strong plan in place for when we do leave”.

She would not be drawn on the number of employees that will lose their job as a result of the exit, but said Nissan’s local operation was “looking at opportunities to redeploy the staff impacted” and confirmed this included Guy Street, who became managing director of Infiniti Cars Australia in May 2018.

Mr Hale said Infiniti Cars Australia holds “enough stock” to keep sales ticking over between now and the still-to-be-confirmed exit date.

He reiterated that the number-one reason for Infiniti’s departure from Australia was that “there was not a way forward to achieve a viable business case”.

Infiniti made a comeback in Australia in September 2012 after an earlier attempt with the Q45 large rear-drive sedan, which was sold through Nissan dealerships over a three-year period during the mid-1990s.

In this latest foray, sales peaked in 2016 with just 807 units before consecutive declines in 2017 (776 units) and 2018 (649 units). To the end of July this year it totted up 351 sales, a year-on-year increase of just one unit.

Year-to-date, the brand’s most popular model in Australia is by far the Q50 sports sedan on 113 sales. The QX70 SUV, Q60 executive sedan and Q30/QX30 small hatch and crossover twins all jostle for second place with between 59 and 64 sales and are closely followed by the Nissan Patrol-based QX80 upper-large SUV on 52 sales.

In a statement issued on Monday, Infiniti said it was “committed to fulfilling its obligations to customers in Australia” and will announce its future service, maintenance and warranty repair arrangements in the coming months.

“Beyond 2020, the company is in the process of establishing the most effective and convenient way of providing full aftersales service for Infiniti owners in Australia,” the company said.

At the moment, Nissan dealerships in Adelaide, Brisbane and Newcastle handle servicing and repair for Infiniti customers in their area and an expansion of this seems logical once Infiniti Cars Australia is disbanded.

However, Ms Leach told GoAuto the company was “still working through plans with our current Infiniti dealers to have that confirmed”.

“We don’t see that we’ll have that level of detail for a couple of months yet,” she said.

After its Gold Coast dealership closed last year – following the loss of its flagship Sydney CBD and inner-city Brisbane showrooms in 2017 and 2016 respectively – Infiniti’s remaining five sales outlets are located in the Sydney suburbs of Castle Hill and Warwick Farm, Bentleigh and Doncaster in Melbourne and the Burswood area of Perth.