Infiniti boss puts EV on hold, reduces sales expectations

TOKYO -- Infiniti's new boss is calling for new priorities.

Less than a year into his job as president of Nissan Motor Co.'s premium marque, Johan de Nysschen is tempering expectations that Infiniti will nearly triple sales in four years.

But de Nysschen remains committed to rapid growth, so he is putting a priority on new models that can deliver quick volume. That means deferring plans for an electric vehicle.

In addition, the halo cars he plans above the current lineup will be toned down from the dramatic sports-car concepts displayed at recent auto shows. They will be more practical, not pure performance offerings, he said.

The dial back may put de Nysschen at odds with Nissan CEO Carlos Ghosn, who recruited the mustachioed South African from Audi last summer. Ghosn assigned de Nysschen the task of cranking Infiniti's global sales to 500,000 units in the fiscal year ending March 31, 2017. Infiniti sold just 170,000 last year.

"I'm under absolutely no illusion -- 500,000 cars by 2017 is an inordinately ambitious challenge," de Nysschen, 53, said in an interview. "We really do have to get our heads around how we can bring the brand in that direction."

To hit that target, he's plowing new investment into starting Infiniti production in China and England and shepherding the launch of volume nameplates, such as an entry-level compact to debut in 2015.

De Nysschen also is pouring resources into at least two halo nameplates above the current flagship M sedan, which will be renamed the Q70. Offering the first public details on those plans, he said those cars will appear by 2020 and be based on the same platform.

The cars will be "high-performance luxury cars, not a sports car," he said. They also will not be variants of a flagship sedan competing in the same space as the Mercedes-Benz S class.

"It will be more Porsche Panamera-like than BMW 7 series-like," he said. "We could then quite conceivably use the same platform to create a more compact 2+2, two-door coupe that could perhaps just dial up the performance and design appeal."

The cars will be of the same ilk as the swept-back Essence concept hybrid coupe unveiled at the 2009 Geneva auto show, he said. The cars will share drivetrains but get different bodies.

What the halos won't be, he said, is a "true thoroughbred sports car" as foreshadowed by the curvy midengine Emerg-E hybrid concept that debuted in 2012 at Geneva.

Meanwhile, de Nysschen has deferred an Infiniti EV launch from the original 2014 timeline, partly because slow-selling EVs won't help him reach the half-million sales target.

"There will be an Infiniti EV. The question is one of timing," de Nysschen said. "We have a whole host of product priorities. We have to make very substantial investments now, and it's important that we expand our volume footprint quite quickly."

At the 2012 New York auto show, Infiniti unveiled a five-passenger LE concept electric sedan. Then in December 2012, the brand said it would launch an all-electric Infiniti -- the brand's counterpart to the Nissan Leaf -- in 2014. De Nysschen says that's on hold now.

"There has been no formal decision yet within the company to give the project the green light and let them start with investment," de Nysschen said of the EV. "In my evaluation of our business strategy, I introduced a whole bunch of additional considerations."

Ghosn's EV ambitions pose a challenge for Infiniti. Ghosn has said he hopes to sell 1.5 million EVs across the range of Nissan, Infiniti and Renault by 2016. The company has spent billions of dollars toward that goal. But cumulative sales so far are short of 100,000 units.

A cautious de Nysschen is balancing an Infiniti EV project against resources needed by other products, such as a halo car.

He said it is "quite an easy decision" to prioritize a product that will cultivate "brand positioning" and "expand our market footprint" over a car that has "perceived progressive technology but is not helping to expand the volume base."

"We had so many priorities," he said. The proposed Infiniti EV "was one where I said, 'Look, I need a little more time.'"

The outlook for EVs is clouded by the lack of a charging infrastructure, uncertainty about future government incentives and questions about where China stands on the technology, de Nysschen said. Rapid technological advancements in batteries also risk making an Infiniti EV quickly obsolete.

"We need to re-evaluate our assumptions," he said. "It would not be so smart to introduce a car when perhaps 12 or 18 months down the road you have all-new battery technology."

If Infiniti falls short of 500,000, he said, it will be because it can't sell that volume profitably: "I will not put volume before profit."

Ghosn said recently that Infiniti's contribution to Nissan Motor's operating profit was "practically erased" in the past two years by the strong yen, which hammered margins on Japan-made exports. But the sharp weakening of the Japanese currency this year should put Infiniti back in the black.

De Nysschen said he won't be upset, "if we don't deliver 500,000 cars by 2016, 2017, 2018, as long as directionally at least we are moving there."

But, he said, "If we are still selling less than 200,000 cars by that time, then you will know the plan has gone wrong, big time."