Nashville, Tenn – Johan de Nysschen, Infiniti’s president, talked to Lou Ann Hammond, CEO, DrivingtheNation about marketshare, brand loyalty, revenue, and profit’s.
Infiniti owns 8% of the premium luxury market, selling about 120,000 cars in 2012.
I asked de Nysschen to compare brand loyalty to marketshare.
de Nysschen said that he had not had statisticians do a correlation, but he’s sure there is one but, “our brand loyalty among existing owners is quite good. What we need to work harder on, and which will inevitably develop over time as we begin to position Infiniti towards the tier one market so we will naturally begin to draw more cross-shopping from the existing established market leaders.”
de Nysschen acknowledged that the car conquests were lean and that right now the bulk of conquests are “coming from the natural migration Nissan owners and other non-premium brands. They migrate upwards in the market, but the level of conquests from BMW, Mercedes, Audi is still single digit. That is part of what the Q50 and the next generations of Infinitis have to address.”
de Nysschen doesn’t subscribe to the fact that marketshare equals brand loyalty, “you will have brands that are in a rapid phase of growth and the only way they can grow that way is by conquest. My former life represented some of that phenomenon, expanded marketshare, but the degree of loyalty to the brand was still in evolution. Particularly for premium brands. If you are a mid-level premium brand you get the aspirational buyers coming up from the bottom segment into your car and then when they are financially able to move on they migrate further upwards and you end up being in that transitional migration. That means that even though all the other measures of criteria your overall loyalty maybe low because your customers are still migrating upwards. When you are a destination brand, then you catch everything in the net. This is a reality of the premium players that are not at that very highest level. I don’t think you can interpret the data that simplistically.”
Is Infiniti trying to be more aspirational, more profit driven, or growing more marketshare?
de Nysschen: The focus for us has to be on creating more premium brand character, ultimately, like all premium brands we need to generate pricing power because brand power creates intangible value that people are willing to pay for and that is the key to profitability. We are not in the numbers game. Infiniti, the way I would like to run the company, is with a very clear profit focus. We cannot generate the investments we need in all the new profit’s we need without a good profit on those projects. So this means we need to focus on generating pricing power and delivering the profit’s that way. A growth has to come from organic growth, from engineering and marketing with an extended portfolio, and of course, new markets. In the markets that we compete in I do not think we will chase volume at all. For me, while we anticipate new growth in the U.S., this will not come by selling more of our existing cars it will come by entering new car segments.
When you look at the statements every month which number is the most important, revenue, earning before taxes or profit?
de Nysschen: Revenue is a useful indicator, but if I have to look at only one it is profit. Revenue without profit is empty.
This video of Johan talking is from the Nissan 360 event in Southern California.