It’s no secret that times are tough for Nissan right now. From talk of potential bankruptcy in as little as 12 months to a fed-up dealer network with many stores losing money, the automaker’s not having a great go of things.
That already seems rough, but things are even rougher for fancy Nissan. Yep, Infiniti’s in survival mode, as Automotive News reports the brand is open to letting some of its dealers move into Nissan showrooms due to a continued downward sales spiral.
Having luxury brands potentially move into mainstream showrooms is rarely good news, because luxury brands trade on image. Different customer service, different physical spaces, anything at all that can be done to differentiate a company’s upscale range from its mainstream range. Lexus is a great example of this, and at the same time, Genesis is currently expanding its standalone retail network. To contemplate doing the reverse isn’t a great look, but it might be necessary for Infiniti.
Previously, we’ve noted reports of Nissan dealerships going into the red. Well, Nissan has a fairly fresh, fairly well-priced lineup, so just imagine how Infiniti dealerships are doing. Thankfully, we don’t have to imagine, because Automotive News has some juicy details to share.
Financial data obtained by Automotive News shows that Infiniti stores had an average net loss of $79,581 in the first nine months of 2024, compared with a profit of $421,169 a year earlier. Dealership return on sales fell to minus 0.3 percent in the first nine months, from 1.3 percent in 2023.
Now, an average net income of, uh, negative $79,581 through September isn’t great, but keep in mind, some of these dealers are doing a whole lot better than others. One dealer that’s not doing so good spoke to Automotive News, seemingly on the condition of anonymity, because this isn’t the sort of anecdote you’d want to have your name attached to.
One Infiniti dealer said he has lost “multiple millions of dollars” since opening the store and is considering consolidation. If he’s not approved, the dealer said he would consider terminating the franchise.
“I’ll lose around $600,000 to $900,000 this year, but I know guys with big stores who will lose $2 million to $3 million,” the dealer said.
Last I checked, “$600,000 to $900,000” is a lot more than $79,581. It’s a wild swing, and part of that can be explained by Infiniti’s continuing sales five. With 197 franchises and a total of 14,540 sales in America during Q3, that works out to just under 74 vehicles per franchise last quarter, or 24.6 per month on average. Worse still, Infiniti sales were down 12.1 percent year-over-year for Q3 and 12.3 percent for the first three quarters of the calendar year, meaning we’re certainly talking about declining volumes. Should things continue down this path, there’s a non-zero chance of Infiniti franchises seeing Alfa-like averages in America.
At these volumes, does Infiniti need its own showrooms? Probably not in many cases. In fact, just look at Canada to see what lies ahead for Infiniti in America. Back in 2021, a number of Canadian dealerships with standalone showrooms in key markets consolidated into local Nissan showrooms. The result? Well, sales aren’t any worse than they were in 2020. In fact, 2020 saw just 5,783 Infiniti vehicles sold in Canada, while 2023 saw that number rebound to 6,208. Through the third quarter of 2024, sales were down 2.08 percent year-over-year, which seems like steadiness rather than a death spiral. Mind you, 2019 saw sales of 10,974, so 2020 did some serious damage, but the lineup was fresher in 2020 than it is today.
So, will consolidating Infiniti dealer franchises with Nissan dealer franchises into single buildings actually save franchisees money? Maybe in the long run, if existing standalone Infiniti showrooms can be sold or repurposed, but in the short-term, no. As Automotive News reports, Infiniti requires consolidated dealers to maintain a separate entrance, service drive, service lounge, showroom, and roster of sales and service staff for Infiniti customers, as opposed to combining some of these elements with the Nissan side of the showroom. They’ll have to do renovations, buy furniture, and splash some cash to image their spaces to Infiniti’s requirements. It’s a lose-lose situation, but would you rather pull the Band-Aid off now or later?
As such, don’t be surprised if a stand-alone Infiniti showroom near you empties out soon. If consolidation is an option, not every franchisee will pass it up, because sometimes it makes sense for certain scenarios. As for what can take the place of Infiniti franchises in these buildings, who knows? One former Infiniti showroom that I pass on the way to see relatives is now repping a VinFast marquee. Anyway, what would you do with an empty former-Infiniti showroom? As ever, leave your creative answers in the comments below.
(Photo credits: Infiniti of Las Vegas, Infiniti; Hang In There via Redbubble)
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My wife bought a G37 in 2009 because she wanted a new sedan and I insisted on RWD. The Infiniti dealer is classy and the people are easy to work with. We cross-shopped BMW but the Infiniti was significantly cheaper with Japanese reliability. The car is fast, handles quite well, and the steering is heavy but precise.
She doesn’t drive much so it just turned over 100k miles with no major incidents. She is fastidious so it is in nearly perfect condition and drives great without all the giant screen / driver nannies / data collection issues of a new car. It is a shame that everyone now assumes she is a vaping wannabe Bitcoin trader but so be it.
I’ve been saying Infiniti needs to die for like ten years. Please god just let it happen.
This is a very sad and fix-able situation, but even if they wanted, Infiniti may not have the runway (time) to implement a fix.
All they need to do is go back to what they used to be: a German-car equivalent at a big discount and much better maintenance/quality.
What should be a big mover is the QX50 / QX55, the car is pretty and looks comfortable, but I cannot recommend it to anyone I like because the powertrain sucks and you can get an X3 for the same price. They could probably readily correct this – all the car needs is a V6 and a ZF geared transmission. Paying BMW prices for a CVT is criminal.
Like others have stated the QX should start at $60K and max out at $85K, not where it currently is priced (~$100k for a reasonably outfitted model), and they need to fix the suspension based on all the reviews I have read.
How many pickleball courts could you get into a closed Infiniti dealership?
It goes without saying that Infinity cant survive without Nissan. A more appropriate title and conversation would be, “Nissan can not survive with Infinity around”
Well good news genesis, you’re about to stumble on a lot of empty car dealerships
“luxury brands trade on image. Different customer service, different physical spaces, anything at all that can be done to differentiate a company’s upscale range from its mainstream range.”
That’s easy, just put the luxury brand dealership on the floor above the mainstream brand dealership with glass floors so the betters can literally look down on the mainstreams. Make sure the floor of the mainstream dealership is highly polished and the walls covered with “aspirational” posters of the luxury cars sold above so the mainstream customer scum are constantly being reminded of their place and that if they could only stretch their budget a bit more they too could be one floor higher looking down.
Then take it a step further and have a super luxury brand dealership above those two dealerships, but this time the floors are one way mirrors so the regular luxury customers can delude themselves into thinking they’re on top and the super luxury customers get the satisfaction of superiority AND anonymity.
And of course all of these dealerships are built over the Hell of a public bus terminal.
I take my inspiration from the airline industry:
https://www.cntraveler.com/stories/2016-05-03/study-walking-through-first-class-on-planes-makes-passengers-angry
But then if you go in wearing your skirt or kilt, then people will be able to see your underwear or if you’re going commando that day…
Some would consider that a perk.
They’re boned. Canning Infiniti is part of my “save Nissan” strategy for good reason.
This article reminded me that Infiniti exists, so that’s not a good sign.
Maybe they can pull a jaguar and drag up some visions from the depths of a K-hole to get their name in the news?
Selling one car per day on the days you’re actually open certainly doesn’t require much staff. Maybe one salesperson, with a minion to do paperwork. One finance guy. The Japanese perfected lean manufacturing, no reason it can’t work for administration.
While I agree with your sentiment, this thought neglects some pretty large expenses month to month that dwarf the amount paid to salespeople. Rent, taxes, insurance- Those aren’t going to change no matter now small the staff is.
As Lee Iacocca famously said “our costs walk in on two legs every morning”