EXCLUSIVE: UK: Infiniti plans Cadillac-like retailer deal

By just-auto.com editorial team | 6 August 2007

Infiniti is on the verge of signing an exclusive single dealership group deal for representation in the UK's notoriously brand-conscious and German-dominated premium car market, which it plans to enter from October next year.

It will become the first premium Japanese group to contest the UK since Toyota's Lexus was established here in 1991, and is part of Infiniti establishing a footprint across 22 European markets.

But Nissan's upmarket division will not announce its British retail partner until this October and is determined to adopt a 12-outlet solus network approach, despite Cadillac's disastrous performance with Pendragon, ironically one of the Infiniti candidates.

Wayne Bruce, Infiniti Europe's Geneva-based communications director, confirmed: "We expect to initial an agreement during the summer. They have premium, luxury car-retailing experience and we will announce the organisation this October."

In addition to Pendragon, another major group thought to be under consideration is Sytner Group, part of the US-controlled Penske Automotive Group, while Scottish-based Arnold Clark Automobiles (ACA) ruled itself out.

ACA managing director Eddie Hawthorn said: "We were approached by Nissan when the company initially wanted to bring Infiniti to the UK. Having looked at the costs involved in bringing it on board we felt there was not a clear business case to support it."

Acknowledging that Infiniti was: "well aware of the Cadillac situation" Bruce said: "We are investing a lot of money and effort in 'Europeanising' our vehicles in Britain, Germany and Spain.  Our cars' characteristics are very different from Cadillac's."

Having sold less than 400 cars in Britain last year, Cadillac has been brought under direct distribution, sales and marketing control of GM UK with the number of outlets cut to five.

Industry analyst Jay Nagley, managing director of Spyder Automotive, cautioned Infiniti to heed the lessons learned from: "the Cadillac-Pendragon liaison fiasco."

He said: "Retailer groups majoring on retail sales don't build car brands. Preserving all the little margins they get doing deals and volume-related bonuses drives them. They have different cultures and are brands in their own rights."

Internally Lexus, with an unequalled customer service record, admits that unprompted European public recognition of the brand as a car maker remains below 10%.

Nagley said: "Infiniti lacks the momentum that carried Lexus forward from its brilliant US launch. It will eclipse Cadillac but must avoid the interim 'Fred-in-a-shed' premises approach."

Each retail outlet is calculated to cost Infiniti's partner around GBP3m ($US6m) due to the prescribed Infiniti Retail Environment Design Initiative (IREDI) dealership template used in North America.

Described by Bruce as: "a boutique hotel interior with a lobby, lounge, and gallery, it has encouraged customers to stay much longer than they do in conventional showrooms."

He added: "There will be strict standards for customer satisfaction, from initial internet contacts to point of sale handling. Staff will be neither overpowering nor too distant. The Germans need not lose sleep over volumes at this stage."

Infiniti's European range for October 2008 involves: the G35 saloon, sitting between BMW's 3 and 5 series, the V6, 3.5-litre G37 coupe, a new EX crossover coupe resembling a scaled up Nissan Qashqai targeting BMW's X3, plus the new FX sports SUV aimed at BMW's X5 with V6 and V8 petrol engines.

Infiniti plans a high-performance V6 diesel, developed through the Renault-Nissan Alliance and vital for Europe, plus a quattro style all-wheel-drive system for the G35 and the successor to the larger M series saloon.