Nissan 2006 Annual Report Download - page 39

From a profit standpoint
2005 was a very good year,
and we met the aggressive
targets we had set. Sales
were flat, though, with no
new models. That was
planned. We’re moving the
brand to the next level, and
we need to look at our
infrastructure. We’ve
outgrown our dealerships, and we need to
expand in order to provide our high level of
customer service to our rapidly growing base of
new Infiniti customers.
Basically, we need to grow and reshape our
dealership’s footprint. When Infiniti was launched in
1989, we had four-car showrooms with six or seven
service bays. That’s adequate when you’re selling
forty thousand cars, but last year we sold 133,000,
and we will grow tremendously over the next few
years. We don’t need a big footprint to display and
sell our vehicles, but we do for service. Luxury
customers won’t wait for service, and they shouldn’t
have to. So we revamped around twenty facilities
last year, and plan to have major expansions at
about forty dealerships in the coming year. These
are major expansions, such as increasing the
number of bays by four to five times a dealership’s
current capacity. When you get all these people
coming in for their regular servicing, you need those
technicians and bays.
The root of the vine must be strong, and that’s
our dealer network. We have about 180 dealers now,
and see 200 as our limit. In fiscal 2005 our biggest
challenge was continuing the launch of the M sedan,
which raised our transaction prices from the mid
30,000-dollar range to over 40,000 dollars. We told
the dealers to get ready—that higher transaction
price brings higher demands.
The typical Infiniti buyer is one of the youngest
and best educated in the luxury market. They don’t
have a preconceived notion of luxury, and they’re as
interested in the technology and styling and what it
says about them as they are in the badge. I think
that’s why the G sedan with the Studio on Wheels
will be successful, because they’ll view it from an
audiophile’s standpoint. It’ll be fun to drive, with great
performance, but offer something a traditional luxury
car doesn’t.
We want to resonate with that younger buyer, and
hopefully they’ll grow with us. All our brand opinion
and awareness metrics have risen consistently.
Our technology edge and younger customer base
have made us number one in online shopping. Since
our customers know a lot before they visit the
dealership, it’s not always a ten-step sales process;
they may be at step seven. Being able to recognize
that is a real key.
We’re very bullish on the future of the U.S. luxury
market. The quality of our new products is bulletproof.
The second-generation G is a beautiful evolution, and
it’s going to give people driving competitor makes a
reason to switch. The crossover segment is the one
I’m watching, because it’s influenced by gas prices
and what’s new to the market.
We also now realize that luxury is truly global.
People around the world have the same standards
and expectations, and that’s communicated
worldwide. For example, Infiniti went into Korea and
we’re now seeing benefits in California. Once we’re in
China and Europe, I think we’ll see even better sales
along the East and West Coasts. That awareness will
boost our image as a global luxury brand.
Nissan Annual Report 2005 37
INFINITI
Pursuing a Global Level of Luxury
MARK IGO
Vice President
GROWTH MOMENTUM