Gunderson expects more changes as Infiniti goes global

Age: 51
Dealer since: 2001
Dealership: Infiniti of Mission Viejo, Mission Viejo, Calif.
Average monthly sales: 75-90 new, 35-50 used
Quote: "There were some great days in the past for Infiniti. But Infiniti's best days are still ahead of us."

Last year brought big changes to Infiniti. The product plan changed. The names of all Infiniti models changed, and Infiniti moved to separate itself further from Nissan, its mass-market sibling. Infiniti also has a new national leader, former Porsche Cars North America executive Michael Bartsch.

A wave of new products is still another year off, according to Matt Gunderson, 2014 chairman of the Infiniti National Dealer Advisory Board. But this also will be a year of change, says Gunderson, 51, owner of Infiniti of Mission Viejo, south of Los Angeles. A new dealer margin system went into effect on Jan. 1 amid hopes of spurring volume and profits. The brand's long-time ad agency relationship is up for review. And changes put into motion last year -- such as Infiniti's corporate autonomy from Nissan -- will be in full effect this year.

Gunderson spoke with Staff Reporter Lindsay Chappell.

Q. Were you just elected to one year or two years as advisory board chairman? Your predecessor, David Rosenberg, was elected to one year but stayed on for a second.

A. I signed on for one, but I'm not sure yet if that means a second one. Dave stayed on for a second year because so much change was taking place at the Infiniti franchise last year, and we thought it would be good for consistency.

Much of the changes that have been planned for Infiniti are going to come to fruition in 2014 and beyond, and the dealer body is incredibly encouraged by what we see coming down the path. But some real extensive, wholesale changes needed to be made for Infiniti as a worldwide brand, and Johan de Nysschen, as worldwide president, led that charge. And now, with Michael Bartsch from Porsche coming in as head of North American sales, the groundwork has been laid to begin moving forward.

So this will be the year that the changes begin to roll out.

What will be key events for you?

The most immediate is with Infiniti's corporate structure. Infiniti is now a separate entity and is no longer going to be working in Nissan's shadow. That's an opportunity for Johan and Michael to drive their own bus and make Infiniti the brand it can be. I saw what Johan did for Audi in the United States, and I believe he can do the same thing for Infiniti, given the autonomy to get it done.

Second, we will be rolling out a new dealer margin system for a total ownership experience performance fund. It will benefit dealers by driving dealership performance and allowing us to make more money. If you want to be a Tier 1 luxury franchise, you need to be profitable to be able to give your customers the experience they're expecting.

And then there will be a product onslaught that begins in 2015. It will be impressive for several years.

How will the new dealer margin system benefit you?

It will drive dealership performance, where good dealers who are delivering the brand experience and brand identity that a Tier 1 luxury dealership should be will be rewarded for it. If you're not performing, you won't be rewarded. It will protect some of the margin for dealers who are advocating the brand and serving the customer in the best possible way.

Your store's Web site makes a point of saying "We don't share showroom or service space with any other manufacturer." Is that a reference to this new effort to separate Infiniti from Nissan?

Yes, I think so. Infiniti is no longer going to be Nissan-plus. It's going to be a stand-alone entity as a franchise and have the flexibility to operate as a Tier 1 brand, much like BMW, Mercedes and Audi. We don't want to live in the shadow of Nissan.

But I'm not sure the idea of Infiniti and Nissan being linked really percolates in the minds of consumers as much as it does in the mind of the media, with the respect it gives the brand. What the separation will give Infiniti is more of an identity as a brand, more than it has received by sharing ad agencies or marketing plans or marketing strategies with Nissan.

To that point, Infiniti has just put its account up for review with longtime ad agency TBWA, which is also Nissan's longtime agency.

Personally, I think that's a great decision. There are a lot of great people at our agency, and I've worked alongside a lot of them. But I don't think you can be under one umbrella and have different marketing perspectives.

I'm confident that Johan would not have taken on this challenge to lead Infiniti worldwide if he wasn't given the empowerment to do what's necessary to make us a success. I served on the dealer advisory board at Audi with Johan, and I watched him turn things around there. I'm certain he'll do it for us, too.

Have you had a chance to spend time with Michael Bartsch, Infiniti's new North American sales executive?

Not yet. We were together at the advisory board meeting in Nashville in December. I told him after I was elected chairman that we don't expect things to be business as usual. And if there are changes in the structure and uses of the board that could help you, we want to make them happen.

We have a nine-member board and there are a certain number of planned meetings. But we're willing to meet as needed on bigger topics.

Michael made a commitment to hold a series of grass-roots meetings with all the dealers, to go over questions concerning the new margin system. There is always some reticence to change for some dealers. But those of us who have experienced an Audi or a BMW-type margin system will recognize the new opportunity and be comfortable.

We have to accept the fact that a dealer and the manufacturers don't have the same agenda. We have to work toward a win-win solution for both sides. There were some great days in the past for Infiniti. But Infiniti's best days are still ahead of us.

As Infiniti envisions that bigger share of the future, do you believe there are luxury customers out there who haven't been captured yet?

I'm not going to kid you. It hasn't been easy being an Infiniti dealer when you're playing in the same arena as the bigger Tier 1 luxury brands. I'm not so sure that there are luxury customers who haven't been found yet. There are a lot of great cars out there.

But the product differentiation is ever-evolving. Our role will be do a better job of leveraging our strengths and communicating what the product is. Product and marketing solve most everything.

Infiniti changed the names of its entire product line last fall. How did it go?

It didn't cause any major confusion. Maybe 10 people were confused. It allowed for some great discussion about our lineup. And when we get past this initial change, it will be water under the bridge, and our product line will be much simpler, 2015 and beyond.

How has the new Q50 sedan gone over with shoppers?

The Q50 is the most technologically advanced car I've ever seen. And it's a phenomenal value. It's been bringing in people we don't normally see in the Infiniti driveway.

What are you looking forward to in the next wave of products?

I can't give you specifics about what's ahead. But I can tell you that there is a commitment to expand the lineup so that we're competing in more segments.

One future vehicle that Infiniti has been open about is a planned small luxury car that it will share with Daimler. What's the potential there?

If you look at the average age of the Infiniti customer, there's really only one younger, and that's Audi. We've got that young performance and value-oriented luxury customer going for us, and so you want to grab them as early as possible. A car like they're talking about will allow us to do that. And there are also fuel economy issues it will address.

Infiniti has pledged more support to the certified pre-owned market. How is that working for the franchise?

There's a gradual acceptance by Infiniti of the relevance of the CPO program, and the fact that with really good new cars you're going to get really great used cars. They're finally seizing that opportunity. They didn't show the commitment or investment in a CPO program in the past, like you saw at BMW and Audi, but they're really coming around.

You can reach Lindsay Chappell at lchappell@crain.com

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