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Having completed phase one of its mission to break into the UK, premium brand Infiniti is now intent on securing a future by engaging with the fleet market. Paul Barker talks to European boss Tony Lewis about the way forward
Japanese prestige brand Infiniti is on the verge of moving to phase two of its plan to gain a foothold in the UK car market by beginning a charm offensive with the corporate world.
Not the easiest of markets to break into as an unproven brand, without heavy and potentially RV-damaging incentives at least, the Nissan-owned marque is taking a soft approach, looking to educate customers and ease residuals upwards as leasing companies and customers experience the product range.
"From January this year our first focus was to make sure there is a clarity to the brand and a product range in the contract hire and leasing industry," Tony Lewis, director - northern Europe, tells BusinessCar. "It doesn't matter what you do with customers if you haven't established the product with contract hire and leasing."
He says each meeting with a contract hire firm was followed by a vehicle demonstration programme and claims that the feedback has been "really gratifying" for a fledgling brand.
"The level of awareness is a challenge in a fleet environment - we don't take it as a given that the leasing market will get the brand positioning any more than a retail customer," he says, revealing that the firm has been talking to the top dozen or so leasing companies in the UK, with mixed results.
"I'm engaging with them.. It's quite evident that some leasing companies are more receptive to the message and a new company," he says, commenting that some of the smaller firms see an opportunity to spread the risk away from what Lewis describes as the "German fortress" of premium brands - Audi, BMW and Mercedes-Benz: "In some cases smaller leasing companies are much more engaging."
Residual values are crucial to Infiniti's ability to compete in the UK, and Lewis says the firm's activity since it first arrived in the UK has slowly built confidence in the residual value arena. "One key thing is to get the RVs aligned to where we think they should be. People have to believe we're going to, in the deepest worldwide recession for many years, do what we say we will do," declares Lewis. "Now we have six dealers, diesel, hybrid and people see when we say we're going to do something we have. People now believe we'll do what we say."
Lewis says the company's growth plans - it's looking to grow from its current 600 cars per year to 15,000-20,000 units in the UK by 2016 - will help residual values because the quantity of used models won't match demand as Infiniti increases its recognition and awareness. "Demand for good value, reasonable mileage used cars will outstrip supply; dealers will want to do 'X' many more used cars than there are out there," he says.
The relationship with parent brand Nissan is also helping to promote a growth in awareness, and the presence of Infiniti recently helped Renault and sister brand Nissan win a five-year 15,000-vehicle contract across Europe with food giant Danone. Lewis says Nissan's field sales team have free rein to promote Infiniti to 25-plus unit fleets. "At the moment we [jump] from the Qashqai+2 at £28,000 to circa £40,000, although into that gap arrives the G saloon next year, and there is a huge opportunity to be had to go from a small hatchback to top-end premium cars," he says. "If you focus on the full range Nissan could offer, you've got everything from forklift to Pixo to GTR to Cabstar, and we've now expanded the proposition to include these premium cars. It helps Nissan's field sales guys say 'I am worth spending time with and maintaining conversations with and inviting back'."
The key to growth is product, and there will be a raft of new or replacement models coming through in the next couple of years. The next generation G saloon, a rival to the BMW 3-series, should launch by the end of next year, and that will benefit from the first fruits of an alliance with Mercedes-Benz meaning it will have access to four-cylinder petrol and diesel engines, opening up the market as the firm has only had larger petrol-engined offerings available so far.
"We have a relatively conservative estimate for that car as a business, but I don't; I think it will make quite an impact," says Lewis. "We're not banking on it, it's a building block, but a significant one." That will be followed in time by a model aimed to compete in the same segment as the Audi A3, while the current line-up will also be refreshed and added to as Infiniti increases its product range to build a serious UK presence.
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