Nissan’s new blow: Luxury brand Infiniti to close US dealerships
Besieged automotive giant Nissan has suffered yet another blow, as it reels from financial crisis to financial crisis.
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Besieged automotive giant Nissan has suffered yet another blow, with news it is set to axe a number of showrooms under its luxury division – Infiniti.
Infiniti is set to draw the curtains on a swath of stand-alone premises in the US and merge with existing Nissan dealerships across the country.
The decision follows Nissan insiders revealing last month the brand had just “12 months to survive” after major European investor Renault signalled plans to scale back its interests in the company.
A week later, Nissan CFO Stephen Ma became the first victim of the brand’s well-publicised money troubles.
The Infiniti move comes amid news sales have dropped more than 50 per cent in five years across the US, according to reports.
MORE:Nissan insiders lift lid on collapse rumours
The luxury brand services 197 dealers across the US but each site only averages 24 car sales per month.
Infiniti data revealed the brand only sold 42,567 new vehicles in the US in the nine months to September this year – down from 87,934 vehicles sold during the same period in 2019.
Nissan North America’s vice president for dealer network development told Automotive News the Infiniti changes were designed to ensure the survival of the brand.
“Our evaluation, first and foremost, prioritises the health of the retailer and Infiniti business,” he said.
“Additionally, we considered expected sales, cost and availability of automotive real estate, and size of existing facilities, among other factors.”
MORE: Global carmaker crisis deepens as heads roll
The Infiniti woes are just the latest setback for the Japanese giant after news following the Renault leaks in November.
Insiders claim Nissan, one of Australia’s best-selling car brands, only has one year to survive as the company scrambles to backfill the gaping hole Renault’s departure will leave in its finances.
Nissan is now searching for a new investor to ensure its survival beyond 2025, according to reports.
Two people with knowledge of the talks reportedly said Nissan was seeking a long-term, steady shareholder like a bank or insurance group to replace some of Renault’s equity holding.
“We have 12 or 14 months to survive,” a senior official close to Nissan said.
The news was swiftly followed by Ma’s departure, with the CFO stepping down days later on December 3.
MORE:Real reason Nissan on brink of collapse
Ma’s loss also follows that of chief operating officer Ashwani Gupta in 2023 and the sensational arrest for former chief executive Carlos Ghosn in 2018.
Nissan chief executive Makoto Uchida will also reduce his monthly salary by 50 per cent as the automaker continues making moves to shore up its finances.
The brand has promised to cut costs, sell off assets and prioritise research and development investment.
Uchida said ”these turnaround measures do not imply that the company is shrinking”.
“Nissan will restructure its business to become leaner and more resilient, while also reorganising management to respond quickly and flexibly to changes in the business environment,” he said.
“We an aim to enhance the competitiveness of our products, which are fundamental to our success, and set Nissan back on a path of growth.
MORE: Car giant burns billions in China failure
“As a cohesive team, we are dedicated to working together to ensure the successful implementation of our plans.”
Nissan has not been alone in its turmoil, with several other carmakers also struggling to cope with a shift toward electric cars, increased competition and weak demand from customers.
Carlos Tavares, chief executive of Jeep parent company Stellantis, quit his post this month as well.
Volkswagen is dealing with strikes in Europe amid plans to shut down factories as its cars shift from petrol to electric power.
Other giants such as Ford and General Motors have openly struggled with investment in electric cars while trying to maintain production of traditional models.
last week GM revealed a shocking $US8billion ($12.4b) hit due to falling demand and profitability.
GM’s sales and market share has been gradually declining as competition in China increases from local automakers.
The loss includes $US5 billion in restructuring costs and a $US2.7 billion hit to GM’s joint venture with Chinese state-owned SAIC Motor.
Originally published as Nissan’s new blow: Luxury brand Infiniti to close US dealerships
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