Although Nissan had announced the formation of the Infiniti division in July of 1987, a full month ahead of Toyota, it did not start selling cars until two months after Lexus. They had half as many dealers and only sold about 2,000 cars in 1989.
Portland, Oregon Infiniti dealer Jerry Dexter was quoted in the Western Advertising News saying, “If the fourth-quarter ads don’t create what dealers want, the dealers will demand that Hill, Holliday has got to go.” In early 1990, Infiniti announced a dramatic change in its $60 million advertising budget and strategy. The rocks, trees, and pussy-willow buds were replaced. The advertising agency Hill, Holliday had no public comment on the change. Bill Bruce, the head of Infiniti, told Paul Ingrassia of the Wall Street Journal that, “Infiniti brand awareness had come more quickly than expected.” Bruce went on, “We always said our number-one objective was to establish a brand, not sell a model.”
“The dealers are encouraged to see Infiniti do this,” said Chris Cedergren of J.D. Power and Associates. Infiniti started running two-page ads in all the major newspapers across the country. The new ads showed the same car from 15 different angles. Al Ries, a prominent marketing consultant, commented, “They go from one ridiculous extreme to the other.” Peter Bossis, Infiniti’s marketing director, countered that the new advertising “fits nicely with the established Infiniti game plan.”
At the same time, Infiniti unveiled a new mid-sized, four-door sedan that would go on sale in the fall of 1990, called the G20. This model was to complement the Q45 luxury sedan and the two-door M30. But the G20 was based on Nissan’s Primera model in Japan. It was under-powered with only a four-cylinder engine and a small wheelbase that was three inches shorter than the ES250’s. Infiniti announced they were going to sell an unrealistic 4,000 G20s a month versus the ES250 plan of 1,500. The Infiniti sales plan was to achieve 100,000 total sales by 1995.
Infiniti was averaging only 1,100 sales a month but had just sold 1,500 cars the previous month—a 36% sales increase leading Bruce to boast, “The increase in month-to-month sales is dramatic.”
I never met Bill Bruce of Infiniti, but I shared his anxiety and pressure to succeed with a new Japanese luxury franchise. It seemed to me he had a much more difficult job than I because of the wooden-headed chief engineer of the Q45 who refused to listen to input from the U.S. sales division. They also had only half-hearted support from Nissan in Japan with the M30 and G20. As a result, Infiniti would cease to be a competitor for Lexus, and we turned our attention to the Europeans, Mercedes and BMW.
“Don’t rejoice when your enemies fall; don’t be happy when they stumble.” Proverbs 24:17 (NLT)
The Lexus recall was behind us, and sales were on the upswing. But our ultimate success wouldn’t be determined by how many cars we sold, but how many of our customers would keep coming back.
(To be continued in “Customer First”)