Infiniti and beyond as Nissan hits China

The move to produce Infiniti models in China, where tariffs of 25 per cent put imported vehicles at a disadvantage, should put Nissan on a better footing to compete with market leaders Audi, Mercedes Benz maker Daimler and BMW, which all produce locally.

Nissan said in a statement that it would build two yet-to-be-identified Infiniti models at factories operated by its joint venture with Dongfeng Motor Group. It did not provide sales or production targets.

Under a mid-term growth plan, Nissan is targeting sales of 500,000 Infiniti vehicles globally by 2016, and has said China would account for a chunk of that growth.

“For the brand to reach its aggressive sales target... local production in the world’s largest automobile market is not an option but a necessity to our success,” Andy Palmer, head of Infiniti operations, said.

Nissan sold about 146,000 Infiniti vehicles globally, mostly in the United States, in the business year ended March 2011. In China, Infiniti sold just 16,126 cars last calendar year, a fraction of the more than 300,000 sold by Audi, Volkswagen’s premium brand.

Nissan’s decision cranks up pressure on Japanese rivals Toyota and Honda which are also looking to catapult sales of their premium Lexus and Acura brands globally, but have given no indication they plan to produce those cars in China.