From: Reuters
Published March 5, 2008 08:19 AM

Infiniti won't forfeit margins for volume: Ghosn

GENEVA (Reuters) - Nissan Motor Co <7201.T> is not interested in expanding sales volumes for Infiniti in the European market if it comes at the expense of double-digit profit margins, Chief Executive Carlos Ghosn said on Wednesday.

Japan's third-biggest automaker, owned 44 percent by France's Renault SA <RENA.PA>, marked the official launch of its premium Infiniti brand across Europe at the Geneva auto show this week, taking an important step in its drive to make the marque a global player.

Ghosn, who also heads Renault, has set a seemingly cautious sales target of 25,000 Infiniti cars in 2013, but stressed volume expansion was not the main goal.

"If volume growth is compatible with high profit margins then it's okay, but otherwise I'm happy to remain a niche," Ghosn told a small group of reporters at the Geneva auto show.

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"It's not enough for Infiniti to have better margins than Nissan -- we're benchmarking ourselves against profitability at (Toyota Motor Corp's <7203.T>) Lexus and Porsche," he said.

Ghosn did not specify a margin target beyond saying it should be in the double-digits, but said: "If you're doing the job right, then 20 percent for a luxury brand is possible."

In a thinly veiled swipe at the biggest premium carmakers, BMW <BMWG.DE>, Daimler AG <DAIGn.DE> and Audi AG <NSUG.DE>, Ghosn said that operating margins of just 7-8 percent for a luxury make was problematic.

Japan's top automakers Toyota, Honda Motor Co <7267.T> and Nissan all make operating margins north of 7 percent with their mostly mainstream vehicles.

Infiniti, which has a growing following in the United States where it debuted nearly 20 years ago, boosted its sales by more than 12 percent last year.

In Russia, where the brand was launched in 2006, sales are expected to come to 6,000 units in the 12 months to the end of March.

Ghosn took the wraps off the new FX50 sport utility vehicle (SUV) late on Tuesday in the first world premiere of an Infiniti car outside North America. The second-generation FX50 SUV has a 5-litre engine generating 390 horsepower.

Infiniti is targeting young, wealthy consumers looking for sporty luxury. Ghosn said research in the United States showed many Infiniti would-be buyers were considering buying a BMW, with fewer looking at the Lexus.

(Reporting by Chang-Ran Kim; Editing by Jason Neely)

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