It is a small leap, but among the most difficult in automotive marketing: making the transition from a premium brand — one in which a higher price is justified by extra features — to true luxury, where the higher price greatly exceeds the product’s functional attributes.
Two brands — one domestic, one import — are currently engaged in making the leap. The effort by Lincoln has been thoroughly examined by the American press, while Nissan’s Infiniti has received far less attention. Yet, to many analysts, Infiniti has the better chance at success.
Achieving true luxury status is like gaining admission to an exclusive club. It means you possess something beyond the basic credentials. You command that extra something that allows you to charge more.
Currently, Mercedes-Benz, BMW, and Audi are charter members of the club, while Jaguar, Land Rover, Maserati, and Lexus hold junior memberships, and Cadillac is an aspirant. Porsche enjoys a dual status as a sports car maker as well as luxury marketer.
Infiniti and Lincoln are following different strategies to gain admission. The Nissan division is using a traditional product-based assault, proven by Audi in the 1990s, where success is predicated on superiority of driving dynamics and advanced technology. Lincoln is making its case based on intangibles like customization and customer service.
Both say that reaching the upper echelon is a process that will take years, and both have suffered setbacks, but Infiniti appears to be in the lead. “Infiniti, with a more diversified portfolio, has a much better chance of capturing younger buyers in costal states, where luxury brands earn their chops,” says AutomotiveCompass analyst Warren Browne. Following, a review of the progress to date:
1. Brand premise
Infiniti already produces accomplished, if overlooked, automobiles, and is building on its record by promising “performance, precision, and passion.” It wants to catch the buyer’s eye with remarkable design and seal the deal with class-leading features, such as steer-by-wire and active lane control.
Lincoln wants to be the choice of “smart luxury buyers” looking for price points that are closer to premium than luxury. To differentiate itself from Ford (F), which employs similar engineering, Lincoln offers customized trim packages and personalized concierge shopping.
2. Market strength
It may surprise even the most experienced market observers, but Infiniti has outsold Lincoln through the first seven months of 2013: 59,995 vehicles to Lincoln’s 45,207. In truth, neither is burning up the track. In an industry that is up 8% overall, Infiniti sales are down 9% and Lincoln 8%. Last year, Infiniti sold 170,000 vehicles worldwide and has publicly announced a target of 500,000 units by 2016. Lincoln says it won’t play the numbers game and hasn’t set any public targets.
3. Legacy flagship
Lincoln likes to remind buyers of its two models from 50 years ago that actually deserve the adjective “iconic:” While strictly speaking a product of the short-lived Continental division and not a Lincoln, the elegant 1956 Mark II stood out in an era known mostly for cars with excessive amounts of chrome. Another flagship, the 1961 Continental (above), was notable for its rear suicide doors, four-door convertible, and enormous size.
Picking an outstanding Infiniti from the past is more difficult, but the third generation M35/M45, made from 2005 to 2010, won an eight-car comparison test by Car and Driver and was named the best luxury sedan by Consumer Reports.
4. Legacy flops
Lincoln has had more than a few. The Versailles, produced from 1977-1980, was the excessively ornamented offspring of a Ford Grenada. The 1988 Continental, based on the Ford Taurus, was the first Lincoln with front-wheel-drive and a V-6 engine, while the 2002 Blackwood, based on an F-150 pickup, with a cargo box for a trunk, lasted only a year.
The first Infiniti, the 1989 Q45, had the specs to compete against top-rung German sedans, but odd styling choices accentuated by a belt-buckle shield device in place of a front grille, depressed its customer appeal. The 1992 J30 featured an odd sloping rear end that never caught on, while the 1999 G20 (above) looked like an orphan that had taken a wrong turn from a Nissan showroom.
5. Name change
In 2006, Lincoln introduced an all-new mid-size sport-sedan reviving the Zephyr nameplate, only to change its name to MKZ in 2007. Then it renamed all its vehicles, except the Lincoln Navigator, with letter names that began with “MK.”
Infiniti is now using a new product nomenclature scheme where all sedans and coupes will carry a “Q” prefix, while all crossovers and SUVs will carry a “QX” prefix. The first model to follow this scheme will be the upcoming Q50, which replaces the G sedan. The rest of the line will be transitioned to the new scheme by the 2014 model year, and confusion will likely ensue.
6. Symbolic marketing move
Infiniti moved its headquarters from Japan to Hong Kong to signal its global aspirations and to put it closer to the exploding Chinese market. Nissan-Renault CEO Carlos Ghosn is above center opening the new HQ.
Formerly a division, Lincoln renamed itself the Lincoln Motor Company to put some distance between it and Mother Ford. Lincoln eventually expects to get half its sales from China and is counting on its customization efforts to get it there but has made no geographic move in that direction.
Carlos Ghosn recruited Audi of America veteran Johan de Nysschen (above) to revive Infiniti. De Nysschen has been creating a mini United Nations by adding French, German, Spanish, and Australian executives. Infiniti’s longtime head of U.S. operations stepped down earlier this month and was replaced by a Porsche executive.
Ford CEO Alan Mulally put further faith in global marketing boss Jim Farley by adding responsibilities for Lincoln to his extensive portfolio. The head of Lincoln’s ad agency was replaced in April, and Lincoln’s current public relations chief is the fourth to hold that job in the past two years.
8. Future products
The redesign of Infiniti’s G37 sedan, now known as the Q50 (above) and the brand’s big seller, hit the market in August as a 2014 model. Sales of the smaller Q30, developed with Mercedes-Benz will start in the 2015 model year. Four more new or redesigned models are due out by 2016.
Lincoln brought out the MKZ midsize sedan this spring and follows with the MKC compact crossover based on the Ford Escape a year from now. A new mid-size crossover derived from the Edge and a full-size sedan from the Taurus family aren’t due until 2015 and 2016 respectively, and Lincoln executives have publically complained about a lack of fresh product.
Infiniti has suspended the LE electric sedan it planned to spin off from the Nissan Leaf platform and instead will create a luxury sedan as well as other models.
Lincoln held up shipments of the new MKZ (above) for some four months to fix quality problems at a time when dealers were starved for new product.
Infiniti is aiming higher than Lincoln by developing exclusive products that will be sold through single-line Infiniti dealers and is aggressively looking globally for opportunities.
Lincoln is being more capital-efficient by using shared technologies and selling through Ford-Lincoln dealers, and by moving more slowly abroad.
Lincoln can provide a good return for shareholders, but Infiniti will make the bigger splash, and, given de Nysschen’s track record, has a better opportunity to join the world’s elite automakers in the luxury tier.