Ghosn says Infiniti quality must improve to build sales

The boss says quality is key to Infiniti's future.

After years with Infiniti at the back of the premium pack, Carlos Ghosn, CEO of Infiniti's parent, Nissan Motor Co., has ordered his team to nail quality once and for all as part of a push to catapult Infiniti into the top three brands of the premium market.

Buoyed by a favorable dollar-yen rate and an ambitious new top executive, Infiniti might have its best chance yet to crack those ranks. President Johan de Nysschen, poached last summer from Audi, aims to push into new segments, restore profitability to Nissan's luxury marque and fix lackluster quality rankings.

"Infiniti wants to disturb the status quo in the premium segment," de Nysschen said during a media event for the Infiniti Q50 sedan at Tochigi, the global hub of Infiniti manufacturing.

Ghosn has ordered de Nysschen to make the brand a top-tier premium player and boost global sales to 500,000 by 2016 from just 170,000 last year.

De Nysschen says expanding into new segments will build sales and brand image. But his first priority is to make Infiniti a more desirable brand that can command a higher price.

"That is more important than just hitting the sales numbers," he said.

Lifting quality is a crucial first step. Doing so should bolster the brand's expansion in China and Europe and push sales beyond his boss's 500,000 goal, de Nysschen said.

"All these together will certainly drive our growth," he said. "By the end of this decade we would not only breach the 500,000 mark but the 600,000 mark."

De Nysschen and his team outlined a checklist of measures to improve quality to compete against Mercedes-Benz, BMW and Lexus. The goal is to lift Infiniti to within the top three in quality among all brands, premium and mass-market, by 2016.

The benchmark cited by Shigeaki Kato, senior vice president for quality, is the J.D. Power and Associates U.S. Initial Quality Study, which measures owners' perceptions of new-car quality after 90 days of ownership.

By that measure, Infiniti has made steady strides. It ranked No. 9 overall in 2010, No. 8 in 2011 and rose to No. 6, tied with Acura, in 2012.

That left it behind No. 1 Lexus but ahead of Germany's luxury triumvirate: Mercedes-Benz, BMW and Audi. Infiniti's M sedan and EX crossover received top honors in their segments.

"We want to elevate Infiniti to leadership among peer brands," Kato said. "Product quality should be within the top three of all brands. This is the concrete target we are aiming for."

On other scales, though, Infiniti still has a lot of work to do.

For example, in J.D. Power's annual U.S. Vehicle Dependability Study, which measures problems experienced in the past 12 months by original owners of 3-year-old vehicles, Infiniti has gone downhill.

From a tie with Cadillac for No. 12 in 2010, it dropped in the rankings to No. 14 in 2011 and No. 27, tied with Jaguar, last year. The number of problems per 100 vehicles from Infiniti actually increased in each of those years.

In the 2013 study, released in February, Infiniti improved to 20th. But it still languished below the industry average.

"We are not close to the target we have set," Kato conceded. "Lexus is undoubtedly No. 1. What we have been doing in terms of quality improvement has not been satisfactory. We realize we have to make a fundamental change in improvement enhancement."

The new push for quality has three components:

1. Institute "Infiniti Certified Plant" status for factories making the cars.

2. Extend quality controls that go beyond the assembly line, from import docks to dealer lots.

3. Implement "Infiniti Mind Training" to instill workers with pride and enhanced skills.

To certify factories, Infiniti wants to improve performance on more than 100 processes inside its assembly plants. Using a scorecard, it will grade a plant's performance. If an audit results in a score of at least 4.5 on a 5.0-point scale, the factory is deemed worthy of "certified plant" status.

Plants that don't reach that level won't stop building Infinitis. But Nissan says it's a way to pinpoint areas of improvement and get its plants competing against one another for company kudos and the chance to snatch work from underperforming plants.

So far, only one plant -- the Tochigi assembly plant -- has passed muster. It makes the Q50, the replacement for the G sedan. It also builds the following vehicles, listed by their current names and what they soon will be renamed under Infiniti's new nomenclature: the M sedan (Q70) and EX and FX crossovers (QX50 and QX70). It also makes the Nissan GT-R sports car and the 370Z sporty coupe.

Other plants currently making Infiniti nameplates, such as the Smyrna, Tenn., factory, which builds the JX (QX60), aren't up to snuff. Nor are the plants that are scheduled to start making Infiniti products as part of the brand's global sales blitz. They include a factory in China that will start building a long-wheelbase Q50 sedan and QX50 crossover in 2014 and the Sunderland, England, plant that will start building a new compact vehicle in 2015.

Those plants ranked between 2.5 and 3.0 on the 5.0-point scale, a slide shown to journalists indicated. Kato said he aims to bring those plants up to standard as the nameplates they build undergo redesigns.

Without question, Tochigi is Nissan's best plant. Since 1995 it has won four plant assembly-line quality awards from J.D. Power, which measures defects per 100 vehicles. But Nissan's awards have been either silver or bronze -- not the platinum or gold awards coveted by the industry.

Tochigi's most recent award was a silver in 2008. In the latest J.D. Power assembly-line study, in 2012, Nissan was blanked by Honda Motor Co., which received one platinum and one silver award, and Toyota Motor Corp., which took home a gold, a silver and three bronzes.

Infiniti also will extend quality control beyond its factory doors. Broader monitoring will cover import ports, storage areas and pre-delivery inspection at dealerships.

Infiniti didn't provide details about how such processes as pre-delivery dealer inspections will change. But it said one example of the improved post-plant quality control is the use of new daily video "quick response" conferences between the plant and customer feedback control rooms to fix problems before they multiply.

"Being a competitive plant: That is the universal goal," said Ryoji Kurosawa, manager of the Tochigi operation, which employs 4,000 people. "We want to take responsibility from the ports all the way to the dealers. We've been expanding the scope of responsibility."

A third component is the Orwellian-sounding "Infiniti Mind Training" program. It is intended to impart to Infiniti workers waza, or skill; kansei, or a sensibility for luxury; and pride in their work and brand.

The objective, Infiniti says, is to "clarify and crystallize what kind of awareness and mind are in need for employees in Infiniti brand plants."

As part of the Tochigi event to illustrate the "mind training," Ghosn took part in a motor-skills drill that is a daily exercise for workers building Infiniti luxury cars. The drill aims to develop hand-eye coordination and to instill an unforgiving attention to detail.

With the stopwatch ticking, Ghosn was all thumbs as he pecked and hunted to order random numbers on a flash card before him.

To pass, workers have to order Nos. 1 through 15 in less than 15 seconds. Ghosn took 22.

"I am an unskilled worker," Ghosn said. "I need more training."

The story Infiniti: Raise quality, sales will follow originally appeared on Automotive News

By Hans Greimel- Automotive News