Gasgoo.com - As Infiniti nears domestic production, more details regarding its business model are being revealed. According a report appearing in the Beijing Morning Post, a direct joint venture will be formed between Dongfeng and Infiniti within the month. Much to the surprise of many in the industry, the partnership will completely cut out Dongfeng Nissan. How this will work given Chinese regulation that limit a foreign company to just two joint venture partnerships with Chinese companies remains to be seen.
According to internal sources from Dongfeng, the Dongfeng Infiniti joint venture will be a 50:50 venture that is not a subsidiary to Dongfeng Nissan. This new partnership model will be a new one for the domestic luxury automobile industry. Dongfeng Group CEO Xu Ping will act as the JV's CEO; other board members will include current Dongfeng Nissan Deputy General Manager Ren Yong and Infiniti China Managing Director Daniel Kirchert. The domestic production Infiniti Q50L, which was displayed at last month's Chengdu International Motor Show, actually had the Dongfeng Infiniti logo emblazoned on its back.
Still, how Nissan-owned Infiniti can legally establish a direct JV partnership with Dongfeng Group is a matter of contention. Nissan already has two JV partnerships in China: Zhengzhou Nissan and Dongfeng Nissan. Commenting on the issues, Du Fangci, an analysts for the China Association of Automobile Manufacturers, explained that the policies were enacted over 20 years ago and are full of loopholes. Nissan can get around the restriction by rationalizing that Dongfeng Nissan and Dongfeng Infiniti are both partnerships with the same company. Mr. Du added that establishing a new JV was preferable for Nissan, as it allowed it to create a new brand image for the country, which it needs to complete with the top-tier German luxury automobile manufacturers. He pointed out that the establishment of an individual JV also would help bring more attention to Infiniti's market aspirations and its domestic production plans.
Ever since former Brilliance BMW Senior Vice President joined Infiniti China last May, the company released strategic plans emphasizing the creation of a new brand and an independent sales channel to sell both domestic production and imported Infiniti vehicles. The new JV will go a long way in giving Infiniti China more of a say in its Chinese operations without influence from Nissan.