Infiniti, Nissan's luxury vehicle division, is taking drastic measures to address its ongoing sales crisis in the United States. The brand has announced a plan to allow some of its dealers to co-locate with Nissan stores, a move aimed at reducing operational costs and preventing a potential exodus of franchisees.
Sales Decline
- Infiniti's U.S. sales have plummeted by nearly 45% over the past decade
- 2013 sales: 116,455 vehicles
- 2023 sales: 64,699 vehicles
- Current average sales per dealership: 24 vehicles per month
Financial Impact on Dealers
- Many Infiniti dealers are facing significant losses
- Some report annual losses between $600,000 and $900,000
- Larger stores may be losing $2 million to $3 million per year
Co-Location Strategy
- Infiniti will evaluate dealers on a case-by-case basis for co-location approval
- Co-located dealerships must maintain separate:
- Entrances
- Showrooms
- Lounges
- Sales and service teams
- Back-office operations can be shared to reduce costs
Market Context
- Infiniti's market share in the luxury segment has dropped from 6% in 2019 to 2.8% in 2024
- The brand faces challenges with an aging and uncompetitive product lineup
- Similar co-location strategy has been implemented in Canada with some success
While this move may provide temporary relief for struggling Infiniti dealers, it highlights the broader challenges facing the brand. As Infiniti works to address its product lineup and market positioning, the success of this co-location strategy will be closely watched by industry observers.
