Nissan to Limit Distribution in China

Washington DC May 16, 2007; The AIADA reported that Nissan, making a cautious foray into the Chinese market, plans to sell about 1,000 of its luxury Infiniti models in the first year there.

Colin Dodge, senior vice president in charge of China operations said in an interview with The Wall Street Journal that the car maker will intentionally keep distribution limited at first, rather than make the car available in dozens of dealerships, in order to effectively build the brand and establish dealers with a high level of customer service.

"You do this badly once and you can never recover," Mr. Dodge said. Nissan, which is expected to start selling the high-end cars in the summer, plans to open 10 dealerships in China by the end of the year.

The Infiniti brand, which first launched in the U.S. in 1989, has been a key driver of growth for Nissan, since higher-end cars producer higher margins for car makers. Foreign car makers have been launching both mass-market cars and luxury models in the fast-growing Chinese market, as demand is mostly spawned by budget-conscious middle-class drivers, and China's newly rich upper class.

Still, Nissan's Infiniti faces tough competition from other, more established premium brands such as BMW, Volkswagen AG's Audi brand and DaimlerChrysler's Mercedes-Benz.