Infiniti weighs US or Mexico for new North American plant
Infiniti is nearing a decision on a new North American factory, with the luxury brand’s president confirming a shortlist of US and Mexican sites and a verdict expected within the quarter.
Infiniti is in the final stages of selecting a site for a new North American factory, with a decision between the United States and Mexico due before the end of the quarter. The planned facility will be the Nissan luxury division’s second production base in the region, supplementing existing output at Smyrna, Tennessee.
Johan de Nysschen, president of Infiniti, confirmed at the Detroit motor show that the shortlist includes both US and Mexican locations. The company’s current North American manufacturing is limited to the QX60 crossover, assembled at Nissan’s Smyrna plant. Expanding output in the region is intended to reduce reliance on Japanese production and help manage currency risk, as well as bring supply closer to key markets.
Factory decision expected this quarter
Infiniti’s decision is expected within the first quarter of 2014. The new plant will join the Smyrna facility as the brand’s only North American manufacturing locations. No details have been given on the specific models planned for production at the new site, but the move follows a broader push by Nissan to localise manufacturing for its premium brand.
The company has already committed to building the compact Q30 at a new UK plant, set to become the global hub for that model. The UK facility is scheduled for completion in 2015 and will produce both petrol and diesel variants of the Q30.
Production footprint expands beyond Japan
Infiniti’s global manufacturing footprint is diversifying rapidly. In addition to the North American expansion, the brand is preparing to begin local production in China at Nissan’s Xiangyang plant. Two long-wheelbase models, the Q50 saloon and QX50 crossover, will enter production there this year, targeting the Chinese market’s demand for premium vehicles with extra rear legroom.
Infiniti’s parent company Nissan shifted the luxury marque’s global headquarters to Hong Kong in 2012, aiming to strengthen its appeal in China and other growth markets. With China sales climbing sharply in 2013, Infiniti expects the country could surpass the US as its largest market by volume before the end of the decade.
What a new North American plant means for Infiniti
A second North American plant would give Infiniti greater flexibility in responding to regional demand and could insulate the brand from exchange rate swings affecting Japanese exports. The choice between the US and Mexico reflects a wider trend among manufacturers considering labour costs, logistics and trade agreements when planning new investment.
- Infiniti’s only North American model currently produced is the QX60 crossover at Smyrna, Tennessee
- Q30 production starts in the UK in 2015
- Q50 and QX50 long-wheelbase models to be built in China from 2014
The outcome of Infiniti’s decision will shape its ability to compete with rivals already building multiple models in North America. The company has not announced when the new plant would open or which models will be assigned to it.
