Infiniti collapse – lessons to be learnt?

  John Swift

On this occasion I take absolutely no pleasure at all in saying ‘I told you so’ in the wake of this week’s news that Infiniti has pulled the plug in the UK and western Europe.

At the start of this month we reported that Rose Kiln Retail, the Infiniti-owned dealer group which had five of the six Infiniti sales sites in the UK (there is another in Belfast) lost £1.4 million but that was only for up to March 31, 2018. Given that during the whole of last year it registered just 750 new cars as sales crashed by almost 80% and 48 in the first two months of this one it would have been interesting to see the equivalent figures for the time since.

As it happens the warning signs were there much earlier. The accounts were long overdue at Companies House and the excuses of ‘an accounting delay’ grew ever thinner and less credible as the days and weeks passed into months. I even wrote a story headlined ‘Crisis at Infiniti?’ back in February but we decided against publishing it.

People have lost jobs and money though and so on this occasion there is no pleasure in being accurate in our assessment.

Is there a lesson to be learnt? Perhaps Infiniti is a textbook case of an unproven brand promising much but delivering little. It took on all the start-up costs of trying to establish a name but failed to clear even that first hurdle with the 2018 accounts still mentioning its uphill struggle to get recognition – 10 years after it began in the UK! – and its retailers had to shoulder the cost of selling from separate showrooms. If there is anything to be taken from this then it is that Cupra, Abarth or DS have the better approach of using some of the existing floorspace and workshop facilities of the mother brand. Perhaps Nissan has been getting a better return per square foot selling Qashqai’s… or as my local dealer once called them, ‘cash cows’.

Stand-alone brands can work and you need only look at Lexus for proof of that but trying to run before you can walk isn’t good business sense. Which is why, and after a lot of earlier scepticism, I think MG may have cracked it. After the slowest of slow starts, the brand now looks to have a measured and realistic growth strategy based on organic growth and it was good to see on Friday that it appointed its 90th retailer, the sixth new one this year, as it heads towards its planned footprint of 120 dealers by the end of 2020.

Good too to see it place such value in physical dealerships staffed by human beings instead of the online-only route to market!

John Swift

Editor

Auto Retail Network

 

Santander

imageTags: Infiniti

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