Automobile

Canadian Infiniti stores can join with Nissan

The intent is to help them lower overhead, combining Infiniti and Nissan service departments and back-office operations to achieve better economies of scale, Infiniti Canada Managing Director Steve Rhind told Automotive News last week.

He said the rooftop consolidation plan is not mandatory.

“This is something that we’re making an option for dealers,” he said. “We are working with them when they want to do it.”

Rhind declined to speculate on how many dealers might make the switch. “We are having the conversation, so we don’t know yet how many will go there,” he said.

But the move should be less impactful than in the past since the COVID-19 pandemic has accelerated online sales and vehicle pickup and delivery services.

“Customer expectations are changing,” Rhind said. “So dealers are asking for a different approach to what their facility might be.”

Some dealers are not entirely happy with the reversal in thinking, pointing out that consolidating stores would put them on the hook for new investment to retrofit their Nissan stores.

“Infiniti was telling us we have all this product coming, it was going to be a booming franchise,” said Rick O’Neill, president of O’Neill Auto Group, which operates an Infiniti store in Newfoundland. “Now they are saying we’re not sure the throughput’s going to be what it needs to be.”

O’Neill said he is losing 350,000 Canadian dollars ($278,000) a year on his Infiniti store.

“They now want me to spend even more on my Nissan building to bring Infiniti in,” the dealer said.

Daniel Beaucage, president of Groupe Beaucage in Sherbrooke, Quebec, said he does not plan to shutter his Infiniti store.

Retrofitting his Nissan store to accommodate the Infiniti operation would cost CA$6 million to CA$7 million ($4.8 million to $5.6 million), Beaucage said.

“It’s too much money,” he said. “And I’m still stuck with the Infiniti building.”

To ensure brand differentiation in a combined store, Infiniti requires dealers to have a separate customer entrance and, in most cases, a dedicated service lane.

“It would never be a showroom within the showroom,” Rhind said. “You will have dedicated Infiniti salespeople, dedicated Infiniti service people, so the customer has a premium experience.”

But in many cases that will mean exterior and interior building work and additional investment in new dealership materials, such as furniture and signage, dealers said.

“New decoration, new tiles, everything has to be changed,” Beaucage said.

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