Nissan suffers another blow: luxury brand Infiniti has hit US dealerships

Beleaguered auto giant Nissan has suffered another blow, with news that it is set to ax a number of showrooms under its luxury division, Infiniti.

Infiniti is set to pull back the curtains on a portion of its US standalone locations and join existing Nissan dealerships across the country.

The decision follows Nissan insiders revealing last month that the brand had just “12 months to survive” after major European investor Renault signaled plans to reduce its stake in the company.

A week later, Nissan CFO Stephen Ma became the first casualty of the brand’s well-publicized cash woes.

Infiniti’s move comes as sales of the sedan have fallen more than 50 percent in five years across the U.S., according to reports.

The luxury brand serves 197 dealers across the US, but each site averages just 24 car sales per month.

Infiniti data revealed that the brand sold just 42,567 new vehicles in the US in the nine months to September this year – down from 87,934 vehicles sold during the same period in 2019.

Nissan’s vice president of dealer network development told Automotive News that the changes to Infiniti were designed to ensure the brand’s survival.

“Our assessment, first and foremost, prioritizes the health of the retailer and the Infiniti business,” he said.

“In addition, we considered expected sales, the cost and availability of automotive real estate, and the size of existing facilities, among other factors.”

Infiniti’s troubles are just the latest setback for the Japanese giant following the news that followed the Renault leaks in November.

Insiders claim Nissan, one of Australia’s best-selling car brands, has just one year to survive as the company struggles to plug the gaping hole Renault’s departure will leave in its finances.

According to reports, Nissan is now looking for a new investor to ensure its survival beyond 2025.

Two people with knowledge of the talks reportedly said Nissan was looking for a long-term, stable shareholder such as a bank or insurance group to replace some of Renault’s stake.

“We have 12 or 14 months to survive,” said a senior official close to Nissan.

The news was quickly followed by Ma’s departure, with the CFO leaving a few days later on December 3.

Ma’s loss also follows that of chief operating officer Ashwani Gupta in 2023 and the sensational arrest of former chief executive Carlos Ghosn in 2018.

Nissan Chief Executive Makoto Uchida will also cut his monthly salary by 50 percent as the automaker continues to make moves to shore up its finances.

The brand has promised to cut costs, sell assets and prioritize investments in research and development.

Uchida said that “these turnaround measures do not mean that the company is shrinking.”

“Nissan will restructure its business to become leaner and more resilient, while also reorganizing management to respond quickly and flexibly to changes in the business environment,” he said.

“We intend to increase the competitiveness of our products, which are essential to our success, and put Nissan back on the path to growth.

“As a cohesive team, we are committed to working together to ensure the successful implementation of our plans.”

Nissan has not been alone in its turmoil, with several other carmakers also struggling to cope with a shift to electric cars, increasing competition and weak customer demand.

Carlos Tavares, chief executive of Jeep parent company Stellantis, left his job this month as well.

Volkswagen is facing strikes in Europe amid plans to close factories as its cars switch from petrol to electricity.

Other giants such as Ford and General Motors have openly struggled with investments in electric cars as they try to maintain production of traditional models.

Last week GM revealed a shocking $8 billion ($12.4 billion) hit due to falling demand and profitability.

GM’s sales and market share have been gradually declining as competition in China increases from domestic automakers.

The loss includes $5 billion in restructuring costs and a $2.7 billion hit to GM’s joint venture with Chinese state-owned SAIC Motor.