With Infiniti sales up a resounding 35 percent in 2003 after a 23.2 percent rise in 2002, dealers want Nissan's luxury division to continue in the same direction it has been going, says St. Louis dealer John Capps.
"If they will dedicate themselves to providing new product every year, something new to chat about and talk up, this franchise will continue to grow and we absolutely will have the opportunity to get into Tier 1 territory," he says.
Capps, the chairman of the Infiniti Dealer Advisory Board, was one of Infiniti's launch dealers in 1989. He knows the luxury market. His Infiniti store is part of eight luxury-vehicle dealerships (Mercedes-Benz, Lexus, BMW, Cadillac, Porsche, Audi, Land Rover and Infiniti) in one campus under the banner of Plaza Motor Co. In 1997, Capps' title changed from owner to president and CEO when he sold a majority interest in his operation to what is now Asbury Automotive Inc. of Stamford, Conn., the fifth-largest dealership group in the country.
Capps talked with Special Correspondent Karen Passino.
How would you sum up the past year for Infiniti dealers?
Infiniti's 170 dealers sold 118,655 units last year, up 35.0 percent year on year. It was the best year in Infiniti's history. I've been told that the average dealer made over $1 million in '03, which is over a 50 percent increase from what they did the year before. So it was a very good year. I think the dealers are buoyant about the franchise.
I think dealers appreciate that (Nissan Motor Co. President) Carlos Ghosn understands the importance of product, the all-inclusive backbone of this industry. And that as long as he can produce great product, timely and ongoing, the dealers will continue to reward him with better market share and better sales.
Does $1 million necessarily mean that dealers are in the pink?
Does "in the pink" mean it's made up for all the years in the past where it didn't do worth a darn? It's only one year, but the trend line has been very positive. It's easy to forget. My wife always told me her pregnancies were miserable, the most pain she has ever had in her life. But the minute each baby was born, the pain was forgotten because of the wonderful "product" that just appeared. I would say the dealers feel the same way.
What is the outlook for this year for Infiniti?
Obviously, one year does not a decade make. But certainly we see the trend; it has been going up for the last three years. We had a meteoric increase this past year. We probably won't have those same giant increases year to year, but as long as we continue to grow our business and grow our market share, even if it is in small increments from this point forward, we are at a level where we can continue to get a good return on our investments.
I don't predict a giant increase in sales this year; I think it is going to be modest, coming off a 35 percent increase. Dealers will continue to increase their volumes and improve their fixed operations. And they'll continue to do a better job (selling) pre-owned Infinitis because they are developing more trades.
What's the hot Infiniti product?
We've been very successful with the G; it was the top car in its class when it came out. Every one of the new products has done well; we haven't had a dog yet.
What's on tap for this year?
We have the new QX56 coming out. It's not a volume vehicle, but I think it's going to do very well.
Will the QX56 bring a new customer to Infiniti?
Yes. Of the imports, it's going to be the largest import SUV of its kind. We look at its sales as being totally incremental. It's a much bigger vehicle; we don't have anything like it, so if we can bring in another 15,000 or 20,000 units, that's a considerable gain, a big part of our increase for 2004. Plus we now have the G35x, which is the all-wheel-drive version of the G. It appeared in November, so we'll have a full year of that product.