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How Infiniti plans to capture the new breed of premium customers

Andy Palmer: "Our design is provocative."
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As Infiniti Chairman, Nissan Chief Planning Officer Andy Palmer is working to reposition the brand as a design- and technology-driven alternative to Germany's premium automakers. Palmer discussed Infiniti's future with Automotive News Europe Editor Luca Ciferri on the sidelines of the British Formula One Grand Prix. The interview took place before Palmer's departure from Nissan to take over as Aston Martin CEO.

What does Infiniti offer that its premium car rivals don't?

Something that is different, personalized and provocative. If you look at the Millennial Generation, what we call Gen Y [people born between the 1980s and the early 2000s], they don't want to drive a car that their father drove.

What does Gen Y want from a car?

They do not buy a standard car off the shelf anymore, even in the volume segment. That's what's driving Nissan Juke, Citroen DS or Fiat 500 sales. Everybody wants a personalized car. Now, in the premium space, they have a choice of essentially three manufacturers [Audi, BMW and Mercedes-Benz]. You can argue maybe to include Lexus or Volvo, but the main players are the three German automakers.

And they keep breaking their own sales records. What can Infiniti do to successfully challenge them?

They produce very, very good cars, but they’re all much the same. I mean, they’re all drawn with a ruler, straight lines, very rational. What Infiniti can do is provide the technology, the ride and handling, the NVH [noise, vibration and harshness] that is equal to those guys – this is one of the benefits of our relationship with Daimler. But Infiniti will put all this in a package that is first of all, by its nature, smaller volume therefore it’s more unique.

So design makes the difference?

Our design is provocative. Some people like it, some people don’t, but it’s basically there to look very different. So it’s not drawn with a ruler, it’s not straight lines, it’s very sensual and will become even more so. It will be all about design motion.

Which current model best exemplifies Infiniti’s vision?

The QX70. It’s my personal car. I drive the Vettel edition [named after Infiniti-sponsored F1 driver Sebastian Vettel]. When you drive a QX70 in Europe it turns heads. It turns heads because it’s such a stand-out design. First and foremost, that’s the differentiation. It’s basically for people who are bored with Germanic, Teutonic looking designs. But it is, in every other aspect, just a great car, on par with them.

Infiniti’s first-half European sales were below 1,800 units. Is your 100,000-unit target for the region by 2020 achievable?

Yes, but our Europe region also includes eastern Europe and Russia, so our sales were about 7,000 from January to June.

Which Germany premium brand has the market positioning in Europe that Infiniti wants to match?

I would say Audi is close to what we target. Audi is new money, the newest member to the club. And I would say if I want to make a simile of who we desire to be cross-shopped with, it’s Audi, product-wise and price-wise.

Infiniti’s European sales will get a big boost from the UK-built Q30 compact model and the QX30 compact SUV due next year. What are your volume predictions?

We have installed a 60,000-unit annual capacity in our Sunderland plant for global supply of both models.

Meet the boss
NAME: Andy Palmer
TITLE: Infiniti Chairman and interim CEO; Nissan Chief Planning Officer
AGE: 51
MAIN CHALLENGE: Establish Infiniti as a design-driven alternative to German premium automakers.

The Q50’s powertrain lineup includes gasoline, diesel, hybrid and four-wheel-drive variants. Are more alternatives coming?

We still have a downsized gasoline engine to come, but the Q50 starts to make the connection between quite a significant improvement in brand awareness in terms of familiarity, overall opinion, purchasing considerations. At the moment, compared with our volume, we’ve got an overleveraged brand opinion. It’s high, and it’s thanks mainly to Formula One.

How do you measure your return on investment from sponsoring the Red Bull F1 team?

If I look at exposure alone, we measure it ever week, every month, every year. The first year, 2011, our F1 involvement gave us a $250 million exposure. In the second year, 2012, it was $339 million, last year $1.2 billion. F1 brand exposure translates into awareness and then that augmented translates into opinion. So we are very happy.

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You can reach Luca Ciferri at lciferri@crain.com.

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