Infiniti reported double-digit sales growth in 2017, and Florida dealer Mario Murgado is confident the brand is in good hands and on the right track for 2018. Key for the franchise, says Murgado, who owns Infiniti Stuart, is the launch of the redesigned QX50 crossover starting this month.
Murgado, 55, is chairman of the Infiniti National Dealer Advisory Board. He believes the QX50 represents a high-water mark for the brand, combining a roomier interior, elegant styling, an advanced new variable-compression turbo engine, and a positive working relationship between the dealer network and the manufacturer.
Murgado's Brickell Motors owns nine new-vehicle dealerships in Florida and Chicago, with another store planned in Jacksonville, Fla. He spoke with News Editor Lindsay Chappell.
Q: Infiniti's sales rose sharply in 2017. What did dealers think of the year?
A:It was a great year for Infiniti dealers. Most dealers would tell you that it was a challenging year for the industry in general, and a particularly tough year for luxury. But good things happened at Infiniti. Our market share increased and sales nationally ended up at over 153,000.
We saw Infiniti increase as a result of two cars. We had the Q60 coupe, which reminded me of the excitement we saw with the G37 coupe. And then we had the benefit of the new QX30 crossover. And you saw a freshen for the Q50 sedan with positive results, even though sedan sales in general have been on the decline.
Infiniti will now get a redesigned QX50 crossover, basically a product that has been around since it was introduced as the EX in 2007. What's the expectation for it?
It is such a great improvement over the outgoing QX50 that I suggested we should give it a different name. I said, "Guys, why don't we call this the QX55?" Because it's a wow. The fit, the finish, the styling, the engineering, the design, the way they pushed the wheels out to make it roomier inside, the interior appointment — we're really looking forward to it. It's a much-needed product for us. It's the perfect SUV, to me. It's the right size. It's where vehicles are moving. It exemplifies luxury.
You sound really enthusiastic about it.
I believe that car is the franchise. That vehicle is going to be the Infiniti franchise for us.
What sense do dealers have that it will go over well with consumers?
We took reservations on this new model. The last time we took reservations on a car, we got about 6,000. For the new QX50, we got 12,000 when we still had three weeks left. People will love it when they drive it.
It will have the first variable-compression turbo. How will dealers market that to customers — as a fuel economy feature or as a performance aspect?
As both. It's an engineering marvel, to be able to give you the performance while also giving you good economy. When you drive it, you'll feel the performance. I think you'll be hearing great stories this year about consumers in dealerships taking a demo ride and being very impressed.
Assuming it will be successful, who at the Infiniti organization gets credit for it?
I believe the person who designs cars always gets the credit. This would have been Alfonso Albaisa, the head designer for Infiniti who has now become the head of design for Nissan globally. His passion permeates this organization. His team is enthusiastic and they want to design and build great cars.
And the credit has to be shared with the leadership at Infiniti, along with our dealer body. We're a small group of dealers but we're a passionate dealer body. Look at our results over the past few years. And when we make recommendations, the manufacturer listens. We told them it was too short, and they listened and lengthened it, stretching it by four inches. We told them our ideas for the future car, and they listened.
But for the final results, the credit has to go with Alfonso and his design team.
Infiniti officials have said they will tightly control QX50 inventory during its launch rather than opening the floodgates, correct?
Yes, that's true. That would do none of us any good. As I said, I believe this car is the franchise. I need this car to be the most successful car and the most successful launch in the history of Infiniti.
There was an inventory problem last year around the industry. Has it been resolved for Infiniti?
There are many dealers who had no problem. There were some dealers who have had some. But the issue has been resolved a lot. [Infiniti Americas head] Randy Parker and his team have done a really good job of saying, "Let's address the problem." Randy understands the importance of being at the right size for the market. A lot of people understand that, but Infiniti has taken steps to fix it.
How would you rate Infiniti's management team?
I'm grateful for them. They really are going out of their way to listen. I don't know of very many auto companies that bring together their entire top management team and the entire dealer board every month. They want to win. And the proof is in the pudding. We were up 11 percent in sales last year. We have a compelling product line now.
The biggest news at Infiniti has to be the announcement in January that Infiniti is going all-electric, except for the big SUV. What do Infiniti dealers think?
I'm sure there are some people who are hesitant about it and some who are excited about it. But the reality is that our world is changing. We're seeing electrification at a faster rate than ever. So I'm glad to see us moving in that direction. I'd rather be at the forefront leading than being in the back reacting. If we can get there first and be ahead of others, other people will be reacting to us.
The onus is on the manufacturer now to produce the greatest and best vehicles. And based on what I saw at the Detroit auto show this year, with the Q Inspiration Concept, and the reaction to it that I observed from the public, I'm very confident of where they're going. It was very luxurious and roomy.
Had that been in the discussion stage for a while with the dealer advisory board?
I can't talk about that. I will tell you that they make a point of sharing ideas with us.
Where will it move the brand?
Electrification is much more commonly being talked about now. You're seeing it at Volkswagen, at General Motors. But with Infiniti, I believe it will help make us more clearly unique. It will be another opportunity to bring the brand more flair and panache, and a higher degree of pedigree and luxury.
Will the transition be a rapid product changeover or will it be enacted slowly enough that customers aren't shocked?
We don't know yet how that will occur. In three years I suspect we'll be very happy with the showroom Infiniti has.
What are the big issues for Infiniti in 2018?
The biggest thing for dealers right now, given the market compression we have, is that we have the right support in the marketplace. We want to be confident that we have good marketing support in place, that we're competitive in the market and that we have the lease support throughout the line. Dealers want to be supported so that we can stay in the forefront. We want to make Infiniti one of the strongest franchises in the industry. That will mean strengthening what we do beyond what the competitors do.
You have stores in South Florida. Are you more concerned with leasing issues than dealers in other markets?
Absolutely. It's one of the largest lease markets in the country. Infiniti has done a good job in leasing there, and they've remained very competitive. We want to make sure they will continue.
How did the smaller QX30 crossover perform as an entry in a new segment for Infiniti?
It was a vehicle that was designed for Europe and we saw an opportunity to be able to bring it into the United States. It gave us another niche. The dealers wanted it and it gave us incremental sales. In my market, it's a vehicle that represents 6 or 7 percent of new sales monthly.
Why did Infiniti stop producing and marketing the QX70 last year?
The QX70 was an incredible car for us early on. When it came to the necessary evolution of it, it couldn't continue to be built, from an engineering point of view. I look forward to a replacement for it.
What should replace it?
We're in an era when a lot of people are interested in looking at SUVs and crossovers, so I'd like to see something different that still touches on that size. I think there's room for a large five-passenger vehicle that's sporty and nice with good utility.
What else should Infiniti add to its lineup?
If it was up to dealers, we'd love to have one of everything. But it would be nice to have a convertible to serve as a halo car for the brand. We did very well when we had the G37 convertible, and I also like the idea of a hardtop convertible, which would benefit dealers in every state.
Infiniti jumped up the J.D. Power vehicle dependability chart this year from last year. What happened?
To get better you have to perform better, and I think we've performed better as a brand and as an automaker. They're building better vehicles with better engines that are more durable.
What does the dealer advisory board want to focus on this year?
We look at all issues. But our main concern will continue to be franchise value — how we can increase the value. We're also going to be watching marketing very closely. We feel we've made great progress in our marketing and it's better now. We'll be looking at service and also financing.
We really look at every sector on a monthly basis, and then we have our committees working on each issue on a monthly basis. We've also been bringing in dealers who are not on the dealer advisory board to get their perspective and consider their various markets. The factory listens very well and they've been very supportive of us.
Certified pre-owned has been an area in which Infiniti wants to make headway. Has that happened?
Infiniti is working on that. We discuss it in our committee on a monthly basis in our meetings, and we re-evaluate it on a quarterly basis to see if we need to make changes.
The best thing they've done on that front is to look at standards we have — how the dealers conduct the business — and also at how we can support it from a finance viewpoint. We're also looking more closely at a future of support in marketing. We're looking at whether there are ways to market certified pre-owned in a digital format. There are smart ways to help the brand there.
They're exploring everything right now that we've given them to digest. Their first fiscal quarter begins April 1, so we believe we'll see some movement at that time.
Another big initiative of the past year has been the use of ICAR-X, the tablet approach to the salesperson-customer sales process. Is that rollout still in progress?
It is still a rollout and it continues to spread. I don't know what percentage of dealers have done it. But our store has adopted it and we're pleased with it. Half of our sales staff are women, and they like it a lot.
The idea of it is to help both the salesperson and the customer move through the sales process efficiently. It has a lot of pros. But I still tell my associates that in the selling process, we like our customers to smell and touch the car.