Flagship, top service are in Infiniti's recipe for Tier 1 status
Dealer since: 2007
Dealership: Prime Infiniti, Hanover, Mass.
Other brands: Acura, Audi, Buick, Ford, GMC, Honda, Hyundai, Kia, Mazda, Mercedes-Benz, Porsche, Scion, Sprinter, Toyota, Volkswagen
Average monthly sales at Infiniti dealership in 2012: 45 new, 45 used
Quote: "If you're a luxury car brand and you want to be Tier 1, in my personal opinion, there should be a flagship sedan. And some of my compatriots would like to see a flagship sports car."
David Rosenberg is back for a second year as chairman of the Infiniti National Dealer Advisory Board. "There are a lot of initiatives in progress and I'd like to see them through," says the Massachusetts multibrand dealer. "When they asked me, I said, 'Absolutely.' I think continuity is great for Infiniti as it works toward becoming a Tier 1 luxury brand."
That's a second year -- on top of a second act to his career. Rosenberg and his father, Ira, had been working together in auto retailing in decades past. In January 2000 they sold the family dealerships to the publicly held Group 1 Automotive, and son David accepted a corporate position with the chain. It was all fine, he says, but the entrepreneurial itch wouldn't go away.
In 2007 he climbed back into the roll of dealer principal, assembling a new group of stores in Massachusetts, New Hampshire and Maine called Prime Motor Group. Rosenberg works as CEO from the head office in Westwood, Mass.
He spoke with Staff Reporter Lindsay Chappell.
We've now seen the next-generation G sedan, which is Infiniti's biggest volume product, at the Detroit auto show. It will be called the Q50. What's your impression?
We saw a preproduction version of it at our recent dealer meeting. It's a great looking vehicle, and it's going to have great technology. It's going to be significant. It's a great follow-up to the JX. The dealers are really excited about it because our current G is getting a little long in the tooth. It needed a styling makeover.
The goal is to have it really compete with the Mercedes C class, the Audi A4 and the BMW 3 series. And I think it's going to do that.
Does the dealer advisory group have any input into Infiniti's product plans?
Is there anything you've requested, by way of new products?
We want a vehicle that hits every volume luxury segment. But if you're a luxury car brand and you want to be Tier 1, in my personal opinion, there should be a flagship sedan. And some of my compatriots would like to see a flagship sports car.
How much did you invest to move into your new Infiniti store?
We spent $7 million.
I guess that's a testament to your views of Infiniti, that you will recoup that kind of investment for a brand that obviously wants to grow and expand, and so forth.
Right. If I wasn't bullish about the future, I wouldn't have spent the money. That's for sure.
What happened for you with Infiniti in 2012?
We increased our market share. Our new sales at Infiniti are up 12 percent. We're averaging about 45 new vehicles a month now.
And the new JX crossover -- you and other Infiniti dealers were optimistic about its prospects for 2012. Has it panned out the way you expected?
Yes. We did very well with the car, right from the start, and we still are. We're also starting to get a lot of referral business from it now, where someone in the neighborhood owns one, and she'll talk up the car to a neighbor or a friend. So it's certainly bringing in customers that we've never had before at that store. They did a lot of things right with the JX.
But I think it's going to take longer for that vehicle to develop a bigger following than I initially thought.
How do you mean that?
I mean that I originally was hoping it would take off immediately at launch and deliver big numbers, and then keep going at that pace. It turns out that it is simply occurring at a more normal pace.
Has there been adequate marketing support for it?
Infiniti did a good job supporting the launch, and now it's just a question of consistent marketing. And the vehicle, like I said, is starting to develop a following, which is great.
How is Infiniti's local dealer ad association working?
It's helping a lot, actually. We're all contributing and Infiniti is supporting it. We contribute a certain dollar amount per car. And as a result, Infiniti's share of voice is up significantly in every market. The total spend is higher, national and local.
I imagine it took some work to get the associations up and running.
Right. We did have to get the dealers to all agree to it. And before that, Infiniti had to agree to do it. The Nissan brand had already come out with their associations, and that made the idea a little easier for us. But it took a lot of discussion and meetings among dealers, because, you know, it does cut into our margins. Not a lot -- but it is a piece of your margin.
In the end, 100 percent of our dealers signed up right away. It was actually a pretty smooth and quick process.
But in the process of setting it up, we also decided to totally revise our advertising standards. And that took an enormous effort on everyone's part, both on the factory side and on the dealer side. We're starting to see some positive results from that.
Why are advertising standards hard to put forth? Who would disagree with the idea?
Well, consider both sides of the coin.
Infiniti wants to be a Tier 1 player in luxury brands. They're not Tier 1 now, but our goal is to become one. But to be a Tier 1 player, you have to act like one. That means you can't have a dealer on the Internet or on television advertising $10,000 off a 2012 QX, or whatever it happens to be. That makes it look like distressed merchandising. It takes away from the whole brand. It detracts from the brand identity.
Now, on the other side of it, you've got those dealers who say, "Hey, we live in America -- it's a free market. I want to be able to advertise what I want to advertise." You also have dealers who are just very aggressive at marketing. They need to be convinced that you can still be aggressive in advertising without causing the brand any distress.
And you succeeded at this.
We did. It's been a little painful for some dealers, maybe. It requires an outside company checking our Web sites for the size and the shape of the Infiniti logo, for example. You have to have a consistent message that you're sending out to the public.
One of the biggest developments at Infiniti last year was the recruitment of Johan de Nysschen from Audi to become the worldwide president for Infiniti. He seems determined to remake the brand. But is there any concern that growing Infiniti is something that primarily needs to occur in newer markets -- such as China and Europe? Do U.S. dealers fear that the brand's needs here might take a back seat?
Well, you bring up a good point. Let's face it, to every manufacturer, especially every import luxury manufacturer, China represents a huge opportunity. Every dealer in the United States is concerned about vehicles going to China that should be coming here.
Right now, I don't have enough Mercedes M classes in stock, and we don't have enough Audi Q7s in stock, and you might wonder how many of those are going to China instead.
But that's not really the case. These allocation plans are set at the beginning of the year. The U.S. is still extremely important. And it is extremely important to Infiniti.
I believe Johan was hired for a reason at Infiniti. I knew him at Audi. I don't believe he would have agreed to leave Audi, where he obviously was very successful, and be enticed to come to Infiniti to just keep things status quo. He's a very dynamic guy. He accomplished so much at Audi, and we're very excited about what his plans are for Infiniti both in the U.S. market and globally.
The more successful Infiniti is globally, the better off we are in the United States as well. Global expansion allows more money for research and development, to be able to add appropriately to the brand's infrastructure and everything else. So I think with Infiniti, we're at the point where Audi was when it came out with the A4 and the A6 and then eventually the A8, where it went from being an also-ran luxury car to being a top-tier luxury car. And Infiniti is really poised to become that.
Is new product what will make that happen?
In the car business, everything is about the product. But it's also about the manufacturer's attitude and the relationship of the manufacturer with the dealer body. And I can say that Infiniti dealers already have a great relationship with the manufacturer. And we know the product is coming. We know money's been invested in product development, and that was evident when the JX came out. It's going to be evident in the next G, and then in the products that come after that. It's really a combination of everything. But everything hangs on the product. You need the right product to appeal to customers.
Infiniti has made a real effort to improve customer satisfaction at dealerships. What kind of results did you see?
We think our efforts are working. It was recently announced that Infiniti had a meteoric rise in sales satisfaction at J.D. Power for this past year.
We were below industry average on sales satisfaction. We moved up the chart this past year. That's important because it speaks to the brand experience.
It's in every Infiniti dealer's best interest to support it. And Infiniti's doing the right things in terms of offering us support. Infiniti is acting like a Tier 1 luxury player when it comes to customer handling and customer issues.
If I've got a problem customer, there's virtually no bureaucracy that I need to go through, and they do everything humanly possible to make sure customers are taken care of. In the case of a failed part, they will ship parts overnight. They've taken parts out of the assembly line to take care of customers.
The sooner you can take care of a customer's issue, the more likely you're going to have a happy customer. You'll have an advocate, as opposed to someone out there talking negatively about you.