Michael Bartsch left as COO of Porsche Cars North America to become vice president for Infiniti Americas less than a year ago. But he is already in the thick of the brand transformation begun a year earlier by his global boss, Johan de Nysschen.
The task entails a new world view for the once North America-only luxury brand. It comes with a new product lineup, new brand positioning, and the full embrace of U.S. dealers to communicate it all to U.S. consumers.
Bartsch, 55, a native of Australia with dual Australian-German citizenship, is the fourth generation of his family in the auto industry. He spoke at his Nashville office with Staff Reporter Lindsay Chappell and News Editor Dave Guilford.
Q: Was the fiscal year that ended on March 31 good for Infiniti in the United States?
A: We finished with sales of about 120,000. Was it our best year? No. Is it on expectation? Yes. And profits were good, although we don't have a final reconciliation.
We have to look back over the year and say that we're comfortable, but there's still an awful lot to be done. So I don't want to take any comfort in the numbers.
Where do Infiniti's repositioning plans stand?
We're right at the beginning. From a USA point of view, and even from an Infiniti Motor Co. point of view, there are going to be three distinct phases, with 2014 and 2015 being basically the preparing-to-grow stage.
That's a little different than the globalization effort. If you look at Infiniti from a global position, it's very much in its infancy. We've just started up in China and sold 17,000 units this past year. And Europe is in even more of a startup position -- they did 11,000 units this year.
By comparison, the U.S. market is quite mature. We've been here since 1989 and are, in fact, celebrating our 25th anniversary.
So for me, these next two years will be more of a preparation for that next major growth phase, which will come in 2016-2017. That's when we will really consolidate the business and get the critical mass we're looking for.
And then the third phase will be around 2018-2020, when we start bringing in some very high-level reward cars. I would see that third period as being a bit of a confirmation for us. At that time, we will no longer be chasing the vision, but there and defending it.
There's an often touted figure about the importance of premium cars, and I think it was Johan who was the first to really say it -- that 50 percent of your profits in this business comes from about 10 percent of the volume. So in that case, we have to look forward to that 2018-2020 phase.
But as we achieve everything we intend to achieve, we will also spend part of our time defending our territory. The market doesn't stand still. You don't have to be a genius to realize that there are a couple of other brands that probably have a vision that's not too different to ours.
What brands, for example?
A good example is Jaguar. And we have to watch Acura and we have to watch Cadillac. Everyone realizes that you need a good presence in this premium segment from an overall group point of view.
A frustrating thing for me is that, while we have good numbers and good profit, we still have the challenge of actually lifting ourselves so that people start genuinely considering us as a Tier 1 luxury brand.
This is something I've had to spend a fair bit of time looking at. We score very high on metrics like the Customer Service Index and the Sales Satisfaction Index. But if I walk into a dealership, or I look at our standards, it's really not reflective of what I would consider Tier 1 premium.
Are you working with retailers to make sure they have the right luxury-brand touch points?
Yes. Premium doesn't stop at the product these days. And every touch point has to deliver basically the promise that's in the brand. It has to be a broader expression of lifestyle. If we are young-minded and we do everything great with the product, we do everything right with our communication and we get them into the dealership, but then somebody offers them a foam cup of coffee with a swizzle stick, what happens to the brand promise? It totally collapses.
Automakers' facility standards have been sore points for dealers everywhere. How do you motivate retailers to invest?
You give them a good return on their investment. It's as simple as that. Where you have poor return on investment, you have dealers pushing back -- quite legitimately. They're pragmatic businessmen. But in a business model that delivers the right return on effort, dealers will make the right investment decisions.
The problem is not the dealers. A far more accurate assessment is that Infiniti understood exactly what we wanted to do and who we wanted to be back in 1989, but we basically got left behind. We sat still.