Infiniti Moves Global HQ to Hong Kong From Japan

Global Head Will Also Be Named to Nissan's Luxury Brand

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Nissan Motor Co., Japan's second-largest carmaker, is preparing to appoint a global head for its Infiniti luxury brand after moving the unit's headquarters to Hong Kong on Tuesday.

Nissan has made its pick and the executive will be named "at a fitting time," CEO Carlos Ghosn told reporters in Hong Kong. Nissan, which introduced the luxury brand to China in 2007, plans to increase China sales by 50% this year, he said.

Nissan is counting on China to help drive growth and challenge Audi AG, Mercedes-Benz and BMW AG. Mr. Ghosn plans to more than triple Infiniti sales to 500,000 units in five years to raise its share of the global luxury-car market share to 10%.

"What they are trying to do in China is what Toyota's doing in the U.S.," said Kota Yuzawa, an analyst atf Goldman Sachs. "It's very much from scratch. Lexus 20 years ago was also from scratch."

Global management, sales and marketing staff for the brand will be based in Hong Kong, while engineers will remain in Yokohama, Japan, said Haruko Wada, a spokesman for Infiniti in Hong Kong. The new headquarters will have a workforce of about 100 by the end of this year, she said.

Nissan's deliveries of Infiniti vehicles in China climbed almost 40% to 19,000 units last year, making it the luxury brand's second-largest market after the U.S., where two-thirds of Infiniti cars were sold last year. "Establishing our headquarters in Hong Kong, the gateway to China, is an acknowledgment of the center of gravity in luxury vehicle sales," Andy Palmer, the Nissan exec VP in charge of Infiniti, said in a statement. He said dealerships will increase from 25 last year to more than 100 over the next year.

Sales of premium cars have "considerable" room to grow as they only account for about 5% of vehicle sales in China, compared with 10% in the U.S. and 16% in Europe, Yuzawa wrote in an April 20 report. Infiniti sales may reach 300,000 in the country by March 2021, according to Yuzawa's report.

Nissan said last month it will begin manufacturing two Infiniti models in China from 2014. It unveiled a stretched version of the Infiniti M sedan designed for Chinese customers at the Beijing Auto Show last month.

Mr. Ghosn said the location of Infiniti's China plant will be announced by the end of the year. Nissan manufactures most Infiniti models in Tochigi, Japan, about 100 kilometers north of Tokyo. The yen's climb, reaching a postwar high in October, led the company to reduce Japan production. In January, Infiniti JX SUVs started rolling off assembly lines in Tennessee.

"The challenge is how they will bring new models to meet local demands," said Masatoshi Nishimoto, an analyst with IHS Automotive. "The Chinese premium car market already is very competitive as there are German luxury brands like Audi and BMW that have already established a good reputation among local consumers."

Infiniti vehicles are sold in 46 countries and regions, with the company planning to expand that to 70 markets by 2016. This year, it will add new markets including Australia, Mexico and Brazil, Mr. Ghosn said.

--Bloomberg News--

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